Friday, September 25, 2009

Bookkeeping: Restarting Position in Myriad Genetics (MYGN)

I find it bemusing that countless stocks I have attempted to short refuse to fill their gap, but Myriad Genetics (MYGN) which just came off a monster of a quarter, actually took the effort to break through support - just to fill its gap. Wonders never cease. Obviously *this* was the name I should of been shorting.

Now if you have been reading for any period of time, you know this is not the type of chart I typically buy... it's horrendous in fact. The stock was rejected at its 200 day moving average, mid September and then while the market has rallied has been faltering day after day. One up day in the past thirteen... ouch.

But due to an excellent fundamental story (I appear to be the last person on Earth who still employ fundamentals as a tool), and a relatively cheap valuation I am willing to make a go of it. Due to the gosh awful chart, this will have to be a longer term position since it certainly has major issues technically in the near term.

---> I've begun Myriad today as my month old limit order finally hit as the "gap" in the chart was filled, we entered at $26.47. I have about a 2% starter position; if indeed the stock breaks below recent lows in the $24s I'll be forced to cut back just to be safe, but I'd rather be a buyer than a seller down here. If the market was in not such a precarious position I'd be putting on a much larger position. The stock is now down 17% in roughly 12 sessions. This will be our second go around with the company.

I will reiterate this market makes zero sense to me - countless stocks with terrible prospects and valuation over 50, 60, 70x 2010 earnings (not 2009, but 2010) are flying and then companies like this, who just reported stellar earnings [Aug 26, 2009: Myriad Genetics Home Run Earnings Report, 2010 Guidance Affirmed] and have excellent long term prospects (>20% long term growth) are hammered. I don't get it, but I'm not a PhD programmed computer chip.

Founded in May 1991, Myriad Genetics' strategy is to understand the role of genes in human disease and then use that information to develop and commercialize products that assess a person's risk of developing disease later in life and guide treatment decisions based on an individual's genetic makeup and specific cause of disease.

[Jul 1, 2009: Myriad Genetics Implodes After Hours on Revenue Miss]
[May 4, 2009: Myriad Genetics Slight Miss on Revenue; Beats on Earnings]
[Mar 2, 2009: Starter Stake in Myriad Genetics]
[Feb 3, 2009: Myriad Genetics - Monster Results]
[Jan 20, 2009: Myriad Genetics - Another Diagnostic Heavy Hitter]

Long Myriad Genetics in fund; no personal position

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