After I posted the VRNS series – Part I Part II Part III – the stock dropped to $14.6 during the regular session where I was able to add to a medium sized position. The stock is trading up 18% in the AH on a mild beat, but let’s see what it does tomorrow. (I don’t advise chasing it, instead, wait to see if it comes in off of the jobs numbers. It also may be a good idea not to buy the whole position at once.)
Volatility can be your friend, but I find I have to deeply understand something in order to have conviction –to know when the probabilities and risk/reward might be lining up– to buy it when its down, or, conversely, cut bait and run when the “most important thing” has changed. Truly understanding risk/reward takes time, hence the three novella-sized posts describing the VRNS background. Investing just may be the hardest –and potentially, most rewarding– game there is. But it will take everything you’ve got. (Speaking for myself, though, its the best job I ever had.)
In other news, Disney beat expectations but the stock is trading down slightly. (Hint: Valuations always matter, it’s just a question of when, not if, the market will pay attention. That said, I am likely to exit tomorrow as I think we see higher levels up to the movie release.)
I’ve also started small positions in BLUE ($69) and FEYE ($21.9). I had a chance late last night to read the latter’s call transcript, which actually fell beneath $21.75 at one point during the day, and there were good things and bad things. We’ll break them down in an upcoming post. For now, the progress they’re making on endpoint is enough to take a speculative stake, even though I still think we’ve yet to see a near term bottom.
As for BLUE, the bloom is off the rose, at least based on today’s price action. BLUE may be one of the most exciting names in the world once you have a sense of what they’re doing. That said, the awe of having a cure for everyone may be fading, but the data in the abstract looked pretty good:
In Bluebird’s case, the good news was this: Six of the nine patients who received the company’s so-called Lentiglobin gene therapy treatment haven’t needed blood transfusions since treatment. The length of time since treatment varies from six to 18 months.
But the bad news was that three other patients, who all have a more severe form of the disease called Cooley’s anemia, have needed some blood transfusions since treatment. The level of treatment is still less than the once-a-month transfusions they would have required otherwise.
To recap: two-thirds of the patients appear to be cured. The rest are being significantly helped. But because all of the patients haven’t been cured, investors drove down bluebird’s stock by 22 percent as of 1:15 p.m. to its lowest point in almost a year. Where as of June, bluebird was worth $5.4 billion it is now valued at less than half that, or slightly less than the Chicago-based retailer, Sears.
As the VRNS series took a bit longer than expected, I wasn’t able to post on ANET and DATA. I grabbed small long positions at the close, the latter of which jumped +20% in the AH. I’ll give you a breakdown of ANET’s legal situation with Cisco tomorrow. DATA will be the subject of a future post. (You already know this, but no chasing in the AH please.)
-g
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