Allergan (AGN) Offering Possible 13.9% Return Over the Next 14 Calendar Days

Allergan's most recent trend suggests a bearish bias. One trading opportunity on Allergan is a Bear Call Spread using a strike $162.50 short call and a strike $167.50 long call offers a potential 13.9% return on risk over the next 14 calendar days. Maximum profit would be generated if the Bear Call Spread were to expire worthless, which would occur if the stock were below $162.50 by expiration. The full premium credit of $0.61 would be kept by the premium seller. The risk of $4.39 would be incurred if the stock rose above the $167.50 long call strike price.

The 5-day moving average is moving down which suggests that the short-term momentum for Allergan is bearish and the probability of a decline in share price is higher if the stock starts trending.

The 20-day moving average is moving down which suggests that the medium-term momentum for Allergan is bearish.

The RSI indicator is at 22.68 level which suggests that the stock is neither overbought nor oversold at this time.

To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here


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Here’s How Pfizer Stock (and Pharma) Stand to Benefit From Mylan Deal
Wed, 31 Jul 2019 09:01:52 +0000
Pfizer (NYSE:PFE) is spinning-off its off-patent drugs business, Upjohn, into a new venture with Mylan N.V. (NYSE:MYL), maker of the EpiPen. The PFE stock price dropped and MYL shares popped on the news of the all-stock pharma mega-deal.Source: Shutterstock Under the deal, Mylan shareholders get 1 share of the new company for each of their shares, and 43% of the resulting stock. Pfizer shareholders will get new shares representing the balance. Mylan shares initially jumped 20% on the news but quickly lost half that gain by July 30, opening at $20.66, offering a market cap of $10.7 billion. Pfizer stock was down 6.43% yesterday.In the process, Mylan CEO Heather Bresch gets to retire ahead of her father. Bresch is the genius behind the 500% EpiPen price hike that followed her taking over the role in 2011. Her father is West Virginia Sen. Joe Manchin.InvestorPlace – Stock Market News, Stock Advice & Trading TipsMylan chairman Robert Coury, who will be executive chairman of the new company under Pfizer executive Michael Goettler, threw Bresch under the bus during a conference call. He promised a "180-degree turn" in the company's direction. Remember TevaMylan would have done better had the company taken a $40 billion merger offer from Teva Pharmaceuticals (NYSE:TEVA) in 2015, but it refused to go along. Teva later spent that money on the generics business of Allergan (NYSE:AGN) but has since fallen hard and is worth just $8.6 billion under the lead of Kare Schultz, the would-be savior who was id'd last week as the second-highest paid CEO in pharma. * 7 Oversold Stocks To Buy Right Now Something like that may be in store for the new company. Generic drugs are a low-profit, commodity business. Such drugs, lacking patent protection, are subject to global competition. Among the products that will go into the new business from Pfizer are former blockbusters like Lipitor, Viagra and Celebrex. Total revenue from the new company is estimated at $20 billion. Mylan had 2018 sales of $11.4 billion and net income of $352 million. Pack Up Your TroublesMylan stock had fallen almost 40% in 2019 prior to the news. A big revenue miss in its first quarter report, announced in May, initially sent the stock down over 20%. Analysts then told investors to sell amid an EpiPen shortage.The deal is classified as a "reverse Morris trust" to avoid taxes, with Pfizer divesting the Upjohn business, then merging it with Mylan. Upjohn production is based in China, and first quarter sales were estimated at $3 billion. Pfizer had first quarter sales of $13.1 billion.The EpiPen scandal has proven embarrassing to the whole industry. After becoming Mylan CEO Bresch put TV ads and extensive lobbying behind the EpiPen. She pushed it as a must-have for schools and parents. She also pushed wholesale prices from $103 for a two-pack of plungers in 2010 to $608 in 2016. The drug administered by the EpiPen, epinephrine, costs just 33 cents per dose, and the EpiPen itself was said to cost $5 to make. * 7 Semiconductor Stocks to Buy for Your Inner Geek The deal also buries a Q2 revenue miss for Pfizer, which earned $5.05 billion, 80 cents per share fully adjusted, on revenue of $13.26 billion. The revenue number fell $70 million short of analyst estimates, and the company cut revenue guidance for the full year by $1.5 billion. Pfizer is shedding low-margin businesses and buying higher margin ones like Array BioPharma (NASDAQ:ARRY) as it tries to get its stock price higher. Bottom Line on Pfizer StockThe Pfizer-Mylan deal is a way to bury the EpiPen scandal. A lot of lobbyists and marketing people are likely to lose jobs as the companies consolidate. Mylan shares that were worth nearly $80 each are now worth barely $20. Pfizer stock is off more than 11% in the past month.On the other hand, Pfizer has a chance to increase its margins, as it won't have low-margin generics in its portfolio. Investors buy Pfizer for its 35-cents per share dividend, which yields 3.37% at the company's July 30 price and is well-supported by earnings. That remains the play.Dana Blankenhorn is a financial and technology journalist. He is the author of the mystery thriller, The Reluctant Detective Finds Her Family, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Small-Cap Stocks to Buy Before They Grow Up * 7 Stocks to Buy With Over 20% Upside From Current Levels * 7 Marijuana Penny Stocks to Consider for Those Who Can Handle Risk The post Here's How Pfizer Stock (and Pharma) Stand to Benefit From Mylan Deal appeared first on InvestorPlace.

T. Rowe Price Buys Fox, General Electric
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Guardant Health (GH) to Report Q2 Earnings: What's in Store?
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