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PRIME
STOCK NEWSLETTER FOR DECEMBER 14th,
2005
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Position
Statement: In our Prime
Recommendation Letter we attempt to identify the
recommendation with the highest probability of
moving higher. We recommend that stop orders
be placed at the time of purchase, and once
the position has moved profitable we recommend
a stop be placed a minimum of $0.375 above the
purchase price and moved higher as the position
moves higher. |
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Today’s Comments: The overall
market finished Tuesday moderately higher after
the Federal Reserve Board raised interest rates
1/4% to 4.25% The move Tuesday turned out to
be relatively broad based with the majority
of the sector indices I track moving higher.
The strongest sectors on the day were the Pharmaceuticals,
Banking, Utilities, Natural Gas, Healthcare
Providers, Biotech, Chemicals, Consumer, Internet,
Broker/Dealer, Cyclicals, Commodities, Insurance,
and Semiconductor indices. There was weakness
in the Airlines, Computers, Disk Drive Manufactures,
Interactive, and Gold/Silver indices. I think
the weakness in the market I've been concerned
about for the last few weeks is coming to end.
The SP-500 and NASDAQ appear to have turned
back upwards. While I continue to believe that
the Dow Jones Industrial Average is the market
leader, another up day in the market and I will
probably look for the Dow to move towards new
yearly highs.
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| Sterling
Calendars for December 14th, 2005 |
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| Date: |
Comments: |
| Dec. 14 |
Winnebago 'WGO'
announces earnings before the open. Est. $0.42 |
The
full earnings calendar for this week can
be found (here) |
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Recommendation:
Vertex
Pharmaceuticals 'VRTX' |
| Company:
Vertex Pharm., Inc. |
Symbol:
'VRTX' |
Closing
Price: $27.26 |
Web
http://www.vpharm.com
|
YH: $27.48
YL: $8.61 |
EPS: ($2.48)
P/E: N/A |
| Shares
Outstanding: 99 Million |
Forecasted
EPS: $1.66 |
Market Cap.:
$2.7 Billion |
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| Dividend:
none |
Yield:
N/A |
Aver.
Daily Trading Volume: 1.5
Million Shares |
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| Price Targets:
$29.08 and then $48+ |
Downside Stop:
$26.41 /share |
| Options Rec.:
January 30 Calls @ $1.00/contract |
Options
Symbol: VQRAF |
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Company Description:
Vertex Pharmaceuticals
Incorporated, a biotechnology company,
engages in the discovery, development,
and commercialization of small molecule
drugs for HIV infection, chronic hepatitis
C virus infection, inflammatory and
autoimmune disorders, cancer, pain,
and bacterial infection. It offers Lexiva/Telzir
and Agenerase for HIV infection. The
company is developing Merimepodib and
VX-950, which are in phase I and phase
II stage; VX-765, VX-702, and Pralnacasan
that are in phase II stage; VX-680,
VX-944, and VX-322, which are in phase
I and preclinical stage; and VX-409
and VX-692, that are in preclinical
stage. Vertex Pharmaceuticals has collaboration
agreements with Aventis S.A.; GlaxoSmithKline
plc; Novartis Pharma AG; Merck &
Co., Inc.; Mitsubishi Pharma Corp.;
and Cystic Fibrosis Foundation Therapeutics
Incorporated. It also has collaboration
agreements with Schering AG; Kissei
Pharmaceutical Co., Ltd.; and Eli Lilly
and Company. In addition, it has a licensing
agreement with Avalon Pharmaceuticals,
Inc. for the development and commercialization
of the IMPDH inhibitor VX-944 for the
treatment of cancer. Vertex Pharmaceuticals
was founded by Joshua Boger in 1989
and is headquartered in Cambridge, Massachusetts.
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Our
Analysis: The shares of Vertex Pharmaceuticals,
Inc. 'VRTX' are a component of the Amex
Biotechnology Index 'BTK' which is trading
at near its yearly high and I have rated
as moving higher form its current trading
levels. The shares of 'VRTX' set a new
yearly closing high yesterday, and in
the process they completed a "cup
pattern" with a measured move to
our lower price target of $29.08/share.
Prior to starting their move up from their
yearly lows earlier this year the shares
of 'VRTX' had been in a long period of
decline and as a result their is not a
lot of resistance ahead of the shares
of 'VRTX' once they surpass our lower
price target until they get up into the
high $40/share level. I have set our upper
price target on the shares of 'VRTX' at
$48+/share, our best estimate of where
the greatest level of resistance on the
shares will come into play. I see downside
support on the shares of 'VRTX' at $26.82/share,
and have set my stops accordingly at $26.41/share.
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| INDICES |
Dow
Jones Industrial Average (INDU):
Closed @ 10,823.72 Last Signal:
Called Lower with the close of 10,805.87on November
30th. Current Expectations:
I am expecting the Dow Jones Industrial Average
to move lower and test 10,705.55 on a closing
basis. Another up day with the Dow and I'll feel
comfortable that the short term weakness is over.
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S&P
500 (SPX): Closed
@ 1,267.43 Last Signal: Called higher
with the close of 1,267.43 on December 13th.
Current Expectation: I am expecting the S&P
500 to continue to move higher and test
1,312.54 on a closing basis.
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NASDAQ
100 (NDX): Closed
@ 1,705.77 Last Signal: Called
Higher with the close of 1,705.77 on December
13th. Current Expectations: I am expecting
the NDX to continue to move higher and test 1,720.91
on a closing basis. |
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CBOE
Ten Yr Treasury Index (TNX):
Closed @ 4.535% Last Signal:
Called Higher after the close of trading on November
30th with a close of 4.500% Current Expectations:
This index should move higher and test then 4.6579%
on a closing basis. NOTE:
With yesterday's trading there is a chance we
may see a trend reversal in the TNX. |
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Stocks
Looking Higher |
OPLK,
SYT, PGR, AAPL, AMAT, VRTX, INTU, SU, BRCM, BJS,
SAFC, MCK, BA, TIN, HSIC, MIL, LOW, IT, AGII, DELL,
C, WMT, A, JPM, MCD, AA, UTX, DVN |
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Stocks Looking Lower |
MSFT,
BBY, CD, EMC, CIEN, HPW, SYMC, MOT, GM, IBM, KO,
ADBE, CVX, AXP, AKAM |
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| Yesterday's
Edition of the Prime Stock Newsletter |
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Sterling Investment Services may hold positions
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within this report. |
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