Stockchase Opinions

Michael Simpson, CFA Allergan PLC. AGN-N PAST TOP PICK Jan 17, 2019

(A Top Pick Dec 15/18, Down 8%) He sold in the $1.90 range. There is talk of them spinning out their cosmetic division but it has not happened yet. He could get back into it. He was unfortunate trading this.
$156.560

Stock price when the opinion was issued

Consumer Products
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TOP PICK

They are known for Botox. Aesthetics is a big part of their business as well as a great urology business and Gastro Intestinal business. They sold their urology business and reinvested their cash into R&D. It is very inexpensive. (Analysts’ target: $271.50).

DON'T BUY

We are in a structural bull market for equities. We are skating through the two toughest months of the year without much volatility. Don’t buy a company that has been put into the penalty box. Stocks that have broken down have an army of people who just want to get their money back.

SELL

(Market Call Minute.) A broken stock and he would Sell it and move on.

SELL

Their number 1 product is Botox and their number 2 product is eye drops, and there is some competition coming from generics for their eyedrops drug. Thinks that is what has been hurting the stock recently. When the technicals are working against you where a stock has fallen below the 200-day moving average, and the price is below both the 50 day and 100 day, technically you want to step away.

TOP PICK

They are the maker of Botox. They have a drug for dry eye syndrome that will come off patent but his analysis of the case for losing all revenue from the drug has them still doing well. They have a good drug pipeline. (Analysts’ target: $225.00).

DON'T BUY

Form a valuation standpoint, trading at 10 times forward earnings with high single digit growth rate. But the stock keeps falling down. He would be very careful with this. Could be a value trap.

PAST TOP PICK

(A Top Pick September 14/17- Down 22%.) This was a high-risk position. They sold a drug to a native band and then they leased the rights back to circumvent potential generic competition. Something cheeky and probably that is why the stock sold off. Their strength is still in Botox and aesthetics. He doesn’t see that changing or being threat. He still likes it. Management is under the gun.

HOLD
Hold onto this stock. Even though the balance sheet is not great, there is a good chance their aggressive earnings outlook will drag the stock back up. It is extremely cheap at these levels.
COMMENT
The aesthetics business of this Botox maker account for over 40% of company revenues and this the top player in the business. They also have clinical drugs for application like urinary, psychiatric and migraines.