Economy:
CPI May 2021 jump 5%, the fastest pace since the summer of 2008 Core CPI rose 3.8% Y-O-Y.
Prior to the release of this report, I noted in a comment that the annual rate would be hot in part due to the negative CPI number reported in May 2020. The FED chooses to de-emphasize CPI and focuses instead on personal consumption expenditure inflation. Personal Consumption Expenditures Price Index
See also, Sticky-Price CPI - Federal Reserve Bank of Atlanta (increased at a 4.5% annualized rate in May, following a 5.5% increase in April, and up 2.7% Y-O-Y)
GDPNow - Federal Reserve Bank of Atlanta (current forecast is for 9.5% real GDP growth in the second quarter)
Notwithstanding those numbers, the federal funds rate remains stuck at .06%. The Fed - Selected Interest Rates (Daily) - H.15 - June 11, 2021. To categorize that .06% FF rate as an extreme historical aberration given the inflation and GDP data would be a massive understatement.
Nationwide Homeowner Equity Gains Hit $1.9 Trillion in Q1 2021, CoreLogic Reports
++++
Markets and Market Commentary:
Amazon, Apple, Facebook, and Google targeted in bipartisan antitrust reform bills Whenever a politician uses the word reform, I have a tendency to reach for my wallet to see whether it is still in my pant's pocket.
The most important market news last week was how quickly and easily investors dismissed the problematic inflation report.
The ten-year treasury yield fell last week.
This is what the real yields on the TIPs look like:
Daily Treasury Real Yield Curve Rates
++++
Donald of course violated Facebook's policies throughout his 4-year term as President without consequences until the very end. He regularly spewed his venom and hate speech, proving beyond any doubt that he is an obviously awful human being. Donald Trump to remain banned from Facebook for two years, effective from Jan. 7 Republicans, for the most part, ate it up and found the Duck entertaining.
National Review writer 'can attest' to Trump pressing conservatives to say the election was 'stolen' | TheHill I would quit humoring these people by agreeing with their self-titled "conservative" label.
Denying Biden Won, Rising Republicans Attack Legitimacy of Elections; republished at MSN.com from the Rejecting Biden’s Win, Rising Republicans Attack Legitimacy of Elections - The New York Times
Maria Elvira Salazar (R-FL), one of the Republicans who beat a democrat incumbent last November, has figured out what is causing the increase in violent attacks against Jewish Americans. The cause is socialism in the U.S. according to Ms. Salazar. Congresswoman under fire for bizarre claim all socialists are ‘anti-Jew’ | The Independent When nonsensical and bizarre claims are made by Trumpsters, a normal state of affairs for them, truth is acquired merely by constant repetition.
At their recent convention, members of America's anti-democracy party censured the Georgia Republican Secretary of State for certifying the election results as required by law. Brian Kemp booed, Brad Raffensperger censured at Georgia GOP convention Raffensperger's sin in Trump's America was his failure to certify Donald as the winner in Georgia notwithstanding the county certifications that resulted in Biden carrying the state and two Democrats replacing incumbent GOP senators. Georgia's republicans have now passed a law that will allow the republican legislators to directly interfere in the vote-counting process, so a close election in that state will go the right way the next time. "One of the most significant changes in the new law is that it removes the secretary of state as chair of the State Election Board, replacing that elected official with a chair selected by the General Assembly. It also allows the state board to remove county election superintendents — a combined election and registration board in most counties — without providing much notice or giving them a meaningful chance to defend against their removal, and then allows the state board to appoint a single person in their place." Suit: Georgia election law threatens voting, speech rights - ABC News
Trump and his allies try to rewrite, distort the history of the pandemic while casting Fauci as public enemy No. 1; republished by MSN.com from The Washington Post
Rep. Mike Nearman (R) instructs people on getting into Oregon Capitol in a video - The Washington Post He has been charged with allowing Trumpsters to unlawfully storm into the Oregon capital building. Some of the Trumpsters attacked law enforcement officers and destroyed property. This Trumpster riot occurred on 12/21/20.
California assault weapons ban overturned: Judge Roger Benitez likens AR-15 to Swiss Army knife in the ruling - The Washington Post Benitez is a Republican. He has no idea how ridiculous he sounds making that comparison.
John Dean Calls Surveillance by Trump-Era DOJ 'Nixon on Stilts and Steroids' What is proved even if the data showed a democrat congressman called or had a call from a reporter? Even if the data proved that happened, that is no evidence that the congressman divulged classified material. Just another abuse of Presidential power by Trump and his sniveling sycophant Bill Barr.
++++
Issuer Calls:
 |
| No Make Whole Payment for municipal bond early redemptions |
 |
| 1 Bond with an $18.56 premium make-whole payment |
 |
| Profit 1 bond = $28.94 |
In another corporate bond early redemption, I am not able to compute the make-whole premium payment but it will be a substantial percentage. I own 4 CoreLogic 7.55% senior unsecured bonds that mature in 2028. FINRA Page (original name First American). CoreLogic is in the process of being acquired and has called this bond. CoreLogic Shareholders Approve Acquisition by Stone Point Capital and Insight Partners; Corelogic, Inc. 2021 Current Report 8-K (redemption expected on 7/4/21)
+++++
1. Canadian Reset Equity Preferred Stocks:
A. Sold 50 FFHPRG:CA at C$17.6:
Quote: FFH-PG.TO
Profit Snapshot: C$151
Last Discussed: Item # 1.A. Bought 50 FFHPRG at C$14.54 (11/13/19 Post)
Par Value: C$25
Issuer: Fairfax Financial Holdings Ltd. (Canada: Toronto)
Placement in Capital Structure: Equity Preferred stock, senior only to common stock. Coupon: 2.56% spread to the 5-year Canadian government bond, resets every 5 years.
Last 5 Year Reset: September 2020 at a 2.962% coupon:
The 2015 reset coupon was at 3.318%.
Next Reset: September 2025
When I bought this preferred stock in 2019, I was expecting an increase in the coupon rate, but then the pandemic hit and interest rates collapsed into the reset time period.
2. Bought 100 AMCR at $11.97:
Quote: Amcor PLC
Closing Price 6/11/21: AMCR $12.25 +$0.18 +1.49%
"Amcor is a global leader in developing and producing responsible packaging for food, beverage, pharmaceutical, medical, home and personal-care, and other products. . . Around 47,000 Amcor people generate $12.5 billion in annual sales from operations that span about 230 locations in 40-plus countries."
This is a new name for me. When discussing this purchase in a comment, I categorized AMCR as a bunt for a single kind of stock. A 10% total return after a 1 year holding period would consequently be viewed as more than satisfactory.
AMCR Analyst Estimates | MarketWatch (as of 6/7/21, consensus 2021 E.P.S. is at $.73, rising to $.79 in 2022 and $.83 in 2023)
AMCR Annual Report for the Fiscal Year ending 6/30/20
5 Year Financial Data Through 6/30/20:
Last Bond Offering (May 2020): $800M 2.69% SU maturing in 2031; FINRA Page
Last Major Acquisition: Amcor Completes Acquisition of Bemis, Creating the Global Leader in Consumer Packaging (6/11/2019)
Dividend: Quarterly at $.115 per share ($.47 annually)
Yield at $11.97 cost per share: 3.93%
Last Ex-Dividend: 5/25/21 (owned as of)
Last Earnings Report (Q/E 3/31/21): SEC Filed Press Release The release does not break out quarterly results.
9 month numbers (Fiscal Year ends 6/30/21):
GAAP Net Income: $684M, up 58%
9 Month GAAP E.P.S. = $.438, up 63%
Adjusted E.P.S. = $.515
Free Cash Flow = $360M, negatively impacted Y-O-Y by $50M resulting from the timing of a U.S. tax payment. Without that impact, free cash flow was up 10%.
Repurchased approximately 2% of outstanding shares
F/Y ending 6/30/2021 guidance:
Adjusted 14% to 15% constant currency E.P.S. growth based on an adjusted $.642 E.P.S. in the previous fiscal year.
Free cash flow = $1B to $1.1B
3. Small Ball:
A. Bought 2 FCX at $41.33; 1 at $40.29 :
Quote: Freeport-McMoRan Inc
FCX Analyst Estimates | MarketWatch
5 Year Mining Data (Annual at pages 28-29):
Copper price falls after China said it will stabilize commodity market - MINING.COM (5/19/21)
Copper Prices - 45 Year Historical Chart | MacroTrends I am skeptical about copper prices being able to hold recent gains. The price per ton was mostly below $1.5 between 1960-2004. The recent price surge did take out the top price hit in 2011.
Last Earnings Report (Q/E 3/31/2021): SEC Filed Press Release
Revenues: $4.85B, up from $2.798B in the 2020 1st Q.
Net Income: $718M or $.48 per share
Adjusted E.P.S. = $.51
Average Realized Prices: $3.94 per pound for copper, $1,713 per ounce for gold, and $11.62 per pound for molybdenum
Average Unit Costs for Copper = $1.39 per pound
Operating Cash Flow: $1.075B
B. Bought 50 TGB at $2.28:
Owns 75% of the operating Gilbralter Mine, one of the largest copper mines in North America and owns other mines that are in the development stage. Those are "the Florence Copper, which is advancing towards production, as well as the Yellowhead copper, New Prosperity gold-copper, Aley niobium and Harmony gold projects."
In-situ Copper Recovery Is a Rare Opportunity for Florence Cooper; Taseko Mines: Court of Appeal Decides in Favor of Florence Copper (3/23/21)(refers to still waiting for EPA to issue "key operating permit"); Taseko Mines Completes Notes Offering and Moves Forward with Florence Copper Commercial Production Facility (2/10/21) Of the projects in development, this one is the furthest along.
Ultimately, whether this Lotto proves to be a winner will IMO be dependent on one or more of those mines in development becoming successful.
TGB Analyst Estimates | MarketWatch
TGB SEC Filings (foreign issuer)
Taseko Mines Limited: SEC Form 40-F Foreign Company Annual Report
Last Bond Offering (2/2021): $400M of 7% Senior Secured Notes. Taseko Mines Completes Notes Offering and Moves Forward with Florence Copper Commercial Production Facility
Results in 2020-2019 Comparison:
Investment Category: Lottery Ticket Basket
I have owned this stock previously as a Lotto.
TGB has recently risen from the dead as shown in this 2-year chart:
Last Earnings Report (Q/E 3/31/21): Taseko Reports First Quarter 2021 Financial & Operating Results
Summary:
Details:
Previous Round-Trip: Item # 6 Sold Lotto TGB at $2.5 (8/10/2009)
 |
| 2009 TGB 100 shares +$141.1 |
C. Pared CSCO-Sold 2 at $49.68; 3.119 at $52.19:
Quote: Cisco Systems Inc.
Last Buy Discussions: Item # 1.G. Added to CSCO-Bought 1 at $38.82; 1 at $38.34; 1 at $37.69 (10/17/20 Post); Item # 1.H. Restarted CSCO-Bought 1 at $42.62; 1 at $42.1; 1 at $41.88; 2 at $41; 5 at $40.75; 1 at 40.33; 1 at $39.45 (9/13/2020)
Profit Snapshot: +$52.46 (5+ shares)
New Average Cost per share this account: $38.5 (13+ shares)
 |
| Snapshot Intraday 5/20 after second pare |
Dividend: Quarterly at $.37 ($1.48 annually), last raised from $.36 effective for the 2021 second quarter payment
Yield at new AC = 3.84%
Next Ex-Dividend: 7/2/21
Last Earnings Report (Q/E 5/1/21): Cisco (CSCO) Reports Third Quarter Earnings GAAP E.P.S. = $.68; Non-GAAP E.P.S. = $.83 with the consensus estimate at $.82 per Fidelity;
revenue = $12.8B up 7% Y-O-Y;
4th Q. guidance: GAAP E.P.S. at $.64-$.69 and Non-GAAP $.81 to $.83 with the non-GAAP consensus prior to this guidance at $.85;
blames lower than forecasted earnings on supply chain issues;
about 3% of growth due to quarter being 14 weeks rather than 13
Overall, I am not impressed with recent earnings and revenue growth numbers.
Last Sell Discussions: Item # 1.N. Sold 4 CSCO at $47.21 (2/20/21 Post)(profit snapshot= $40.16); Item # 2.F. Sold 3 CSCO in Fidelity Taxable Account at $42.8-highest cost lots (12/25/20 Post)((+$1.79)
Item # 1.H. (9/13/2020)(contains snapshots of round-trip trades starting in 2009 through 2019 generating a profit of $1,804.65)
Broker Reports (available to Schwab customers):
Morningstar (5/20/21): 3 stars with a $50 FV, raised from $48 in this report
Credit Suisse (5/20/21): Neutral with a $46 PT.
Argus (5/20/21): Buy and rates as core long term holding
S & P (5/20/21): 4 stars with a 12 month PT of $59.
CSCO Profits 2009 to Date: $1,899.06
I did not take snapshots prior to starting this blog in 2008 or track profits in specific stocks.
D. Pared FLO-Sold 5 at $24.86 - highest cost lot Schwab Taxable:
Quote: Flowers Foods Inc.
10-Q for the Fiscal Quarter ending Q/E 4/21/21
FLO Analyst Estimates | MarketWatch
Our Family of Brands – Flowers Foods (primarily bread)
Flowers Foods At-A-Glance – Flowers Foods
Last Discussed: Item # 1.L. Added to FLO Bought 1 at $21.92 (3/20/21 Post)
I discussed the earnings report for the quarter ending 1/2/21 in that post.
New Average Cost per share this account: $22.38 (20+ shares)
 |
| Snapshot Intraday 5/20/21 after pare |
Yield at New AC = 3.57%
Last Ex-Dividend: 6/9/21
Last Earnings Report (Fiscal Quarter ending 4/24/21):
Flowers Foods Reports First Quarter 2021 Results
Adjusted E.P.S. $.41
Consensus at $.37 or $.39 depending on the service compiling
GAAP E.P.S. at $.34 with Net Income at $71.655M
Revenues: $1.3B
FLO reported $41.386M in non-cash depreciation and amortization expenses that reduce both GAAP and non-GAAP earnings.
"For the first quarter of fiscal 2021, cash flow from operating activities decreased by $8.2 million to $98.0 million, capital expenditures increased $5.6 million to $27.3 million, and dividends paid increased $2.2 million to $42.5 million."
The adjusted E.P.S. number does not add back those non-cash expenses but only a 6 cent loss on the extinguishment of debt and non-recurring consulting costs of 2 cents per share.
E. Started as a Placeholder BMRN-Bought 2 at $77.65 (Vanguard); 1 at $77.55 (Fidelity); 2 at $76.95 (Schwab):
Current Position All Accounts: 5 shares with a $77.35 average cost per share
Maximum Position: 20 shares
Purchase Restriction: 1 or 2 share lots at the lowest price in each chain.
Quote: BioMarin Pharmaceutical Inc.
Closing Price 6/11/21: BMRN $82.07 -$1.60 -1.91%
Website: BioMarin Pharmaceutical Inc.
BMRN Analyst Estimates | MarketWatch
5-year chart:
The two drugs that are furthest along are Vosoritide for Achondroplasia (brand name "Voxzogo") and Valoctocogene Roxaparvovec for Severe Hemophilia A (brand name "Roctavian").
The stock fell 35% in 1 day when the FDA issued a Complete Response letter requesting more time to evaluate Roctavian. FDA rejects Roctavian, BioMarin hemophilia drug - CBS News (8/19/20): FDA Delays Decision on Roctavian, Hemophilia A Gene Therapy Candidate, for a Year or More (8/19/20) Approval was previously expected this August. If approved for marketing, the commercial launch will probably be delayed until the 2022 second half. The phase 3 study showed that Roctavian reduced the bleeding rate by 84%. BioMarin Announces Positive Phase 3 Gene Therapy Trial Results in Adults with Severe Hemophilia A; Study Met All Primary and Secondary Efficacy Endpoints in One-Year Data Set - Jan 10, 2021
Roctavian, Potential Hemophilia A Gene Therapy, Get Fresh FDA Support;
In late April, the FDA's decision on the Voxzogo NDA was delayed until November 2021, an additional 3 months, to afford that agency more time to review recently filed and updated Phase 3 trial results covering a 2 year period.
Drugs (includes patent expiration information):
5 Year Historical Financials:
 |
| Page 59 Annual Report |
 |
| Page 8-9 Annual Report |
Last Earnings Report (Q/E 3/31/21): SEC Filed Press Release
GAAP to Non-GAAP:
2021 Guidance:
Due to generic competition in the U.S., 2021 first-quarter revenues for Kuvan fell to $70.8M from $122M in the 2020 first quarter.
F. Eliminated T in Vanguard and Schwab Taxable Accounts-Sold 31+ at $29.91 and 9 at $29.91:
 |
| 31+ Schwab |
 |
| 9 Vanguard |
Quote: AT&T Inc.
Closing Price 6/11/21: T $29.32 +$0.14 +0.48%
AT&T Inc. Analyst Estimates | MarketWatch
5 Year Chart:
I have become weary of AT & T.
The five-year annual average total return (dividends reinvested) currently stands at -.45%. DRIP Returns Calculator | Dividend Channel
Last Buy Discussions: Item # 1.M. Added To T: Bought 2 at $27.95; 1 at $27.78; 1 at $27.57; 1 at $27.13 and 1 at 26.77 (10/24/20 Post); Item # 4.A. Bought 5 T at $27.7 and 10 at $26.95-Used Commission Free Trades(1/16/19 Post)
Profit snapshots: net of +$49.32
Management claims that the reduced dividend will be competitive at the slashed rate, a point that has an appearance of validity but is only a legerdemain. One of the comparison stocks used when making that claim is Verizon. The difference is that a stock like Verizon has more than doubled in price since 2010, as it has raised its dividend, while AT & T's stock is about where it was 11 years ago and the dividend is about to be slashed 50%. AT & T's management and Board have incinerated billions of shareholder capital. The DirectTV acquisition price was one of the most boneheaded money-losing decisions made in the past 50 years.
Last Sell Discussions: Item # 1.A. Sold 11 AT & T at $38.21- Highest Cost Shares (3/7/20 Post)(profit = $73.88); Item # 1.B. Sold 13 AT & T at $38.49 (10/30/19 Post)(profit $74.41); Item # 1.E. Sold 10 T at $37.77 (1/28/18 Post)(profit = $42.65); Item # 7 Sold 102+ AT&T at $28.96 (11/3/2010); Item # 5 Sold 100 AT & T at 28.69 (9/27/10 Post). Those sales in 2010 resulted in a $750.6 profit.
 |
| 2010 AT & T |
I started to sour on AT & T thereafter and never came close to owning even 100 shares since 2010.
I am likely to keep my remaining 40+ shares at least until I receive the Discovery shares. My average cost per share is $28.47:
 |
| As of the close on 6/11/21 |
G. Pared BMY in Schwab Taxable-Sold 1 at $67.1:
Quote: Bristol Myers Squibb Co.
BMY Analyst Estimates | MarketWatch
Bristol Myers Squibb: Investor Relations
Products and Medicines - Bristol Myers Squibb
Profit Snapshot: $5.55
New Average Cost per share in this account: $60.83 (13+ shares)
 |
| Snapshot Intraday 5/20/21 after pare |
Dividend: Quarterly at $.49 per share ($1.96 annually)
Yield at new AC = 3.22%
Last Ex Dividend: 3/31/21
I discussed the last earnings report in Item # 3.B.
Last Buy Discussions:
Item # 1.M. Added to BMY-Bought 1 at $59.9; 3 at $59.7 (2/21/21 Post)
Item #3.M. Added to BMY- Bought 2 at $61.05 (1/1/21 Post)
H. Pared IGR-Sold all shares purchased with dividends at $8.31:
Profit Snapshot: +$49.1 (5/20/21 sale only)
Average Cost per share after the pare this account: $5.15 (182 shares)
 |
| Snapshot Intraday 5/20/21 after pare |
Yield at New AC of $5.15: 11.65%
Data Date of 5/20/21 Trade:
Closing Net Asset Value Per Share: $9.06
Closing Market Price: $8.32
Discount: -8.17%
5 Year Average Discount as of 6/4/21: -13.28%
Sourced: IGR-CEF Connect
Goal: Any total return in excess of the dividend payments before ROC adjustments to the tax cost basis.
I. Pared CGBD in Fidelity Taxable-Sold 12 at $13.65:
Quote: TCG BDC Inc.
Management: External
2020 Annual Report (risk factor summary starts at page 23 and ends on page 50)
3 Year Historical Data (pp 57-58)
Profit Snapshot: $3.51
New Average Cost per share in this account: $12.71 (123+ shares)
 |
| Snapshot Intraday 5/21/21 after pare |
Dividend: Quarterly at $.32 per share (regular only)
CGBD has been paying a supplemental dividend. The last one was $.04 per share paid in the 2021 second quarter, down from $.05 paid in the first quarter.
Yield at $12.71: 10.08% (regular only)
Next Ex-Dividend: 6/29/21
Last Earnings Report (Q/E 3/31/21): SEC Filed Press Release
NII per share = $.36
NAV per share = $15.70
Internal Risk Ratings:
Net Asset Value per share history:
Net Asset Value ("NAV") Per Share History: Sourced from 10-Qs
3/31/21: $15.7
6/30/20: $14.8
6/30/19: $16.58
6/30/18: $17.93
6/30/17: $18.01
The Initial Public Offering was in June 2017. The public offering price was $18.75. The external advisor paid 50% of the $.56 per share underwriters' discount's Prospectus CGBD's offering expenses were then estimated at $1.8M or approximately $.20 per share. After those net expense items, the net proceeds to the BDC were about $18.27 per share.
J. Bought 1 VOX at $135.71:
Quote: Vanguard Communication Services ETF Overview
Closing Price 6/11/21: VOX $140.87 +$0.47 +0.33%
Sponsor's Website: Vanguard
Expense Ratio: .10%
Holdings: 114 stocks
Holdings with a greater than 1% weighting:
K. Pared JQC-Sold 5.99 shares at $6.57:
Quote: Nuveen Credit Strategies Income Fund Overview- A leveraged CEF
Sponsor's Website: Nuveen
Nuveen Credit Strategies Income Fund-SEC Filed semiannual shareholder report for the period ending 1/31/21
Last Buy Discussion: Item # 2 Bought 100 JQC in Vanguard Account at $5.82(7/11/20 Post) That lot has been sold.
Leveraged: Substantial at 36.41% as of 4/30/21
Profit Snapshot: +$4.86 (5/25/21 sale only)
New Average Cost per share = $5.58 (80 shares)
 |
| Snapshot Intraday 5/25/21 after pare |
Dividend reinvestment has been turned off. All shares purchased with dividends have been sold.
Heavy ROC Support even after cuts
Next Ex-Dividend Date: 6/14/21
Data Date of 5/25/21 Sale:
Closing Net Asset Value per share: $6.99
Closing Market Price: $6.57
Discount: -6.01%
Average 5-year Discount: -9.91%
Sourced: JQC- CEF Connect
The largest gain to date was $1,060.29. Item # 5 Sold 804+ JQC at $9.35 (5/16/12)
Credit Quality: Junk
Current Opinion: Unfavorable (1) based on declining monthly dividend rate; (2) narrowing discount below 3 and 5-year averages; (3) junky portfolio; and (4) high leverage subject to a potential rise in cost.
Goal: Any total return--before ROC adjustments to the tax cost basis-- in excess of the dividend payments.
L. Added to VRTX- Bought $50 at $208.34; $50 at $207; $50 at $205.5; $20 at $198.83; $50 at $196.44; $20 at $194.83; $20 at $194; $50 at $193 and CRSP Buys:
I am not exactly swinging a big stick on this one. More like a twig 1/4 of the size of my little toe.
Quote: Vertex Pharmaceuticals Inc.
Closing Price 6/11/21: VRTX $193.02 -$23.75 -10.96%
Average Cost Per Share: $206.58 (3+ shares)
 |
| Snapshot as of close on 6/11/21 |
VRTX was slammed yesterday based on VX-864 failing in a Phase 2 trial for Alpha-1 antitrypsin deficiency. Vertex Announces Primary Endpoint Achieved in Phase 2 Study of VX-864 in Alpha-1 Antitrypsin Deficiency That sounds like a success but VRTX went on to state in the press release that the positive impact was "unlikely to translate into substantial clinical benefit" and consequently VRTX will end the trial.
Broker Response on 6/11/21:
Morningstar maintained its 4 star rating and a $259 fair value estimate, noting that it had given only a 10% chance that VX-864 would be approved by the FDA.
On the same day, VRTX and CRSP announced positive results from the ongoing trial for CTX-001. Vertex and CRISPR Therapeutics Present New Data in 22 Patients With Greater Than 3 Months Follow-Up Post-Treatment With Investigational CRISPR/Cas9 Gene-Editing Therapy, CTX001™ at European Hematology Association Annual Meeting I believe this may have been largely anticipated based on an earlier disclosure.
VRTX Analyst Estimates | MarketWatch
Pipeline | Vertex Pharmaceuticals
5 Year Chart: The share price break in October 2020 was caused by another drug failure.
Prior to yesterday's news, I attributed the recent share price weakness to concerns about the longevity of VRTX's cystic fibrosis drug franchise and what comes next. The failure of the VX-864 compound exacerbated the "what comes next" concerns.
VRTX owns 60% of CRISPR Therapeutics gene-editing CTX001, having paid CRSP dearly for that interest. This therapy is currently in early-stage trials for sickle cell anemia and beta-thalassemia therapy. Even if the therapy is approved by the FDA and other regulatory agencies, there still may be a question of whether VRTX received an adequate rate of return on its substantial investment.
I initially thought that VRTX was a safer way than CRSP to play CTX001, since CRSP has already monetized a 60% interest and VRTX has significant revenues from its cystic fibrosis franchise, but that has not turned out to be the case so far.
Maximum VRTX Position: 10 shares (2 shares recently bought in other accounts)
My CRSP dollar position is currently profitable in this account and has a higher dollar value than VRTX:
 |
| Fidelity Account as of the close on 6/11/21 |
I own 2 CRSP shares in other accounts:
I am not sure now what my limit will be on a CRSP share position. Right Brain wanted to take the position up to 100 shares when the price fell below $100, but the Old Geezer nixed the effort. Instead of buying 100 shares, our Head Trader here at HQ, Left Brain, bought $100 when the price fell below $100:
