Timely exit from GILD a couple of days ago, as the stock was not acting well. Now we know this was due to some adverse hep-c drug reaction, (the market knew, it is efficient…). Earlier good news from trials on the same drug sent the stock soaring despite mediocre earnings, had my biotech friends all giddy about the prospects and kept me in the stock for a week or so. No follow through in a market near resistance is why I was gone. More importantly, news like today is often the way markets move biotechs. Notice too that competitor stocks are moving up, Vertex, Achillon. Bad news for one drug trial does not have to mean good news for other competing trials. If anything, it should be cautionary regarding the difficulty of developing such drugs at all. This does not make sense to me, but there is that ETF/portfolio convergence game again. That said, down 20% may not be a bad re-entry point for GILD, but the dust has to settle first.
Chatter about Kellogg being interested in DMND after having taken Pringle from P&G, causes a steady upward climb in the stock price (now 10%, adjust stops). I am not sure how to evaluate this chatter, there are probably synergies for Kellogg, this might be a good end-game for a beleaguered DMND board, wait for analysts to weigh in on it. Remember all it takes is for Kellogg to say “no mas” and the air comes out. If there is buyout interest, I suspect there will be a nice premium from current levels. Also waiting for restated DMND earnings (promised by the middle of the month, where are they?).
Nordstrom cautious on its future outlook, earnings growth is not exciting. Not covering yesterday’s short until below 50. Still keeping the FOSL play, looking at FAZ and wondering if that is so 2008!!! I chose MS instead, for more downside exposure.