Bull’s Eye Report: Pharmacyclics (PCYC)

This short-term trade gives the opportunity for double-digit gains

   

At StateoftheMarkets.com, we strive to “own the best and ignore the rest” in our equity portfolios. Toward this end, each day we search our database for a “top stock” (a top rated company in terms of earnings strength as well as company and industry performance) that presents a strong technical “set up” and a good entry point.

In short, when our equity team is looking to add a stock to one of our portfolios, the “bull’s eye” stock shown below is generally their first choice.

Company Symbol Industry Stock Rating YTD% Gain S.T.
Stop Loss
Pharmacyclics Inc PCYC Biotechnology 9.9 +26.17% $77.46

Why We Like The Stock:

Pharmacyclics (NASDAQ:PCYC) is our most compelling buy today due to the fact that it is a top rated stock (in terms of earnings strength and company/industry performance) in an explosive sub-industry, biotechnology. Comparable biotechnology companies Onyx Pharmaceuticals (NASDAQ:ONXX), Seattle Genetics (NASDAQ:SGEN), and Medivation (NASDAQ:MDVN) may not look the same as the SPDR Biotech ETF (NYSE:XBI), or even similar to each other, but they do have one thing in common – when these stocks gain, they gain big. PCYC is already up over +25% on the year, but it’s short-term potential back to its early March highs is an additional +16% from its current price. The stock pulled back throughout March, based through the first few weeks of April, and is making what appears to be another bullish run currently. We wouldn’t buy the stock if it fell below its 18-day moving average ($78.28 – just above our stop at $77.46), but it looks like a great opportunity at current prices. Just $2 below its 50-day moving average, PCYC could be a quick way to net a double-digit gain on a short-term trade, especially given the way biotech has been trending lately.

We Would Be Buyers:

At the current price (~$81.40) or on a pullback to the 10-day moving average ($79.72).

Company Profile:

Pharmacyclics, Inc. is a clinical-stage biopharmaceutical company focused on developing and commercializing small-molecule drugs for the treatment of cancer and immune mediated diseases. The company’s clinical development and product candidates are small-molecule enzyme inhibitors designed to target biochemical pathways involved in human diseases. As of June 30, 2011, it had three drug candidates under clinical development and a number of preclinical lead molecules. This includes an inhibitor of Bruton’s tyrosine kinase (Btk) (PCI-32765) in Phase II studies in hematologic malignancies; a Btk inhibitor lead optimization program targeting autoimmune indications, an inhibitor of Factor VIIa (PCI-27483) in a Phase II clinical trial in pancreatic cancer, and a histone deacetylase (HDAC) inhibitor (PCI-24781) in Phase I and II clinical trials in solid tumors and hematological malignancies as of June 30, 2012.

Stock Rating: 9.9

The Stock Rating indicates the combined score of our proprietary Earning Strength and Company Performance models. The rating scale is 0 – 10 with 10 being the highest.

Pharmacyclics – Last Three Months

PCYC 1 Bull's Eye Report: Pharmacyclics (PCYC)

Pharmacyclics – Last 12 Months

PCYC 2 Bull's Eye Report: Pharmacyclics (PCYC)

Pharmacyclics – Last Five Years

PCYC 3 Bull's Eye Report: Pharmacyclics (PCYC)

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At the time of publication the editor and affiliated companies own the following positions: None

Note: Positions may be bought or sold while this publication is in circulation without notice.


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