Vertex Pharmaceuticals Incorporated (VRTX) — This biopharmaceutical company develops small-molecule therapies for the treatment of a variety of diseases including cystic fibrosis, hepatitis C and anti-inflammatory conditions.
On July 29, Vertex Pharmaceuticals reported Q2 revenue rose 20% year over year, beating expectations, on strong sales of cystic fibrosis treatment Kalydeco. The loss of 54 cents per share was less than a year ago and better than estimates.
Analysts at Capital IQ increased their projected loss for this year to $1.10 per share from an estimated loss of $0.48 previously due to higher costs. But they forecast earnings of $5.62 per share in 2016. And they estimate the company’s recently approved cystic fibrosis drug Orkambi could reach $2 billion in sales next year, while Kalydeco sales could hit $800 million.
Three days ago, VRTX stock sliced through the top of a trading rectangle that had been five months in the making. The breakout was accompanied by high volume and a strong buy signal from the MACD indicator.
Just before the breakout, my proprietary indicator, the Collins-Bollinger Reversal (CBR), flashed a strong buy signal as VRTX stock found support at its 200-day moving average. On the day of the CBR buy signal, shares jumped 14 points from the low of the day to the closing price, an indication of extremely high volatility.
Therefore, try to buy this speculative biotech stock on a slight pullback to its breakout point at $140 with a four-month trading target of $155 for a potential gain of more than 10%.
