POTW Update, Week 31, Day 2

Sirtuck takes the lead in the Pick of the Week contest.  His pick for week 31, Visa Inc. (NYSE: V), jumped 7.68% today as analysts forecast solid Q3 earnings for the credit card processor.

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IMCL Showing Some Strength Today

At precisely 11:32:55 this morning, IMCL broke through its multi-year high.  As I type this it is trading at 43.91.  As Martha might say, “this is a good thing.”

Dow Jones Industrial Average Crosses 13,000 for First Time

In case you weren’t watching, the Dow Jones Industrial Average crossed 13,000 this morning for the first time in history.



As you can see, it crossed the 13,000 line three times by just a few minutes after 10:00.  Of course, this market is based on 2007 dollars, which are fairly weak.  If you were to index this to the high in 2000 based on the value of U.S. dollars in 2000, we probably still have some ground to cover.  But psychologically this is good for the markets in general.

CNBC’s Jim Cramer is predicting that the DJIA will be above 14,000 by the end of the year.  I like that kind of optimism, and I hope he’s right, but I wouldn’t bet the farm on it.

Back Into IMCL

Investing note:  I reopened my long position in ImClone Systems (NASDAQ: IMCL) today @ 40.50.  The negative effect from the news release earlier this week wasn't nearly as strong as I thought it was going to be.  My expectation is that there is going to be a healthy run in this stock at some point between now and mid June, and after struggling with this one for so long I just don't want to miss it.  Naturally there is risk, but we already know IMCL will be moving into 2nd and 1st line colorectal cancer treatment, so the downside risk is somewhat mitigated.

Baker Hughes, Inc.

I just opened a long position in Baker Hughes, Inc. (NYSE: BHI) this morning for $69.40.

This Houston based company is a supplier of products and technology services and systems to the worldwide oil and natural gas industry, including products and services for drilling, formation evaluation, completion and production of oil and natural gas wells.  It's showing a very healthy 27% profit margin and a relatively low multiple of 10, with a forecast of 15% growth in earnings in its next fiscal year.

ImClone Drops on Negative Pancreatic News

ImClone is trading between 7 and 8 percent lower this afternoon as I write this and here is why:

NEW YORK, April 10 /PRNewswire-FirstCall/ -- ImClone Systems Incorporated (Nasdaq: IMCL) and Bristol-Myers Squibb Company (NYSE: BMY) today announced that a Phase III study of ERBITUX(R) (Cetuximab) plus gemcitabine (a chemotherapy) in patients with locally advanced unresectable or metastatic pancreatic cancer did not meet its primary endpoint of improving overall survival.

Link to the whole story.

Needless to say I'm really disappointed by this news.  I was so hoping for positive results out of this trial, not only for the obvious reasons of price appreciation to a stock that I happen to own a lot of, but also for the fact that tens of thousands of people who are diagnosed with this particularly hard-to-treat form of cancer will now not receive a more powerful weapon with which to fight it.

On an investing note, I sold all my shares early this afternoon for an average price of $39.181.  I am considering either buying some Aug. $40 call options or else perhaps simply buying back the shares I sold—hopefully at a lower price.  I do still believe the data to be released at ASCO the 1st week in June will drive the price higher, but things are just a bit too dicey right now to be making any hasty moves.  I've decided to wait for the dust to clear somewhat.

Don't Top Off Your Tank Just Yet

The May price for a barrel of light sweet crude on the NYMEX fell 4% today.