Tuesday, January 12, 2010

Bookkeeping: Closing Myriad Genetics (MYGN) as Oppenheimer Analyst Brings Out the Hammer

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I was a little suspicious something was going to happen with Myriad Genetics (MYGN) as the stock has been acting quite poorly the past 2 sessions - especially yesterday with the volume perking up and the stock down sharply in a benign market.  We never know what is going on behind the scenes but I assume (allegedly) Oppenheimer was getting its clients out of the stock, before today's downgrade



Today's downgrade has effectively destroyed the chart and the "breakout" is done with, which was our reason for buying back into the name.  With that said, I am going to take the 8% loss and run for the hills; this was roughly a 1.7% stake which we had just restarted December 23rd.  The original breakout actually worked to perfection, from mid $25s to $27 in 2 wees, but we did not lock in any profits and in 3 sessions the entire move was erased - through yesterday.  Hence we lost not only our unrealized profit but also some capital.  Can't win 'em all; always difficult when (often wrong) analysts have such impact on stock prices.
  • An Oppenheimer analyst downgraded his investment rating on shares of Myriad Genetics Inc. Tuesday, saying sales of its cancer tests will continue to slump.  Analyst Amit Hazan downgraded the shares to "Underperform" from "Perform" and cut his profit estimates for Myriad in fiscal 2010 and 2011. He said the Salt Lake City company may report sales growth in its current quarter, but he does not think it will last.
  • "We believe the oncology segment is now in sustainable sequential decline," he said. Hazan added that demand for Myriad's BRACAnalysis test for hereditary breast and ovarian cancer is not improving, and fewer women are keeping OB/GYN appointments due to the state of the economy.
  • Hazan cut his fiscal 2010 profit estimate to $1.41 per share from $1.47, for the following year, he now expects $1.47 per share, down from $1.68. According to Thomson Reuters, analysts expect Myriad to earn $1.45 per share for the year ending June 30, and $1.57 per share for the following year.
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