ABBV AbbVie Inc Continues To Impress (NYSE:ABBV)

abbv

Intro & History on ABBV (NYSE:ABBV) : 

 

In the biotech and medical marijuana arena, we think that ABBV AbbVie Inc. (NYSE ABBV) is an interesting and well known stock to keep an eye on. ABBV is a pharmaceutical development, discovery, manufacturing and sales firm based in Illinois near Chicago, and traded on NYSE and they are, according to Wikipedia, the world’s eighth-largest independent biotech company by market cap. AbbVie falls squarely into the “Big Pharma” category. From their own company literature they are:

 

“…a global, research-driven biopharmaceutical company committed to developing innovative advanced therapies for some of the world’s most complex and critical conditions. The company’s mission is to use its expertise, dedicated people and unique approach to innovation to markedly improve treatments across four primary therapeutic areas: immunology, oncology, virology and neuroscience.  In more than 75 countries, AbbVie employees are working every day to advance health solutions for people around the world.”

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AbbVie originated in 2013 when Abbott Laboratories decided to separate into two separately traded companies. Abbott is now focused only on medical devices, equipment and nutrition products whereas AbbVie is strictly in the pharmaceutical research and manufacturing business.

 

They manufacture several products, which in this day and age of ubiquitous pharma adverts, can arguably be called household names. The two most prominent of which – for our purposes anyway – are Humira and Marinol. Humira – This immunosuppressive drug accounts for over 60% of AbbVie’s revenue and is used to treat Crohn’s disease and happens to be the highest grossing drug *in the world*, with over 15% growth in the past year alone. There are so-called “patent cliff” concerns looming, but I’ll address those momentarily.   Marinol – This marijuana derivative, also known as Dronabinol, is marketed to chemotherapy, AIDS and other patients dealing with nausea, vomiting and suppressed appetite resulting from a pathology or treatment regimen. It is currently regulated as a Schedule III substance under the Controlled Substance Act, differing markedly from marijuana which sits at Schedule I and carries unreasonably harsh criminal penalties in many places in the United States and abroad. Medicinal cannabis/marijuana is currently approved in over half of the United States.

 

Recent News & Developments:

ABBV currently has an alphabet soup of promising experimental drugs in the hopper. The one drawing the most publicity is Upadictinib (formerly research chemical ABT-494) which recently significantly outperformed a placebo in clinical trials for rheumatoid arthritis. The FDA recently rejected Baricitinib (developed and submitted by Eli Lilly and Incyte) thereby seriously limiting competition for Upadictinib. Now all AbbVie has got to do is find a catchier name for Ubpadictnib it and send out the sales force. I kid, of course; if history is any indication, it could be named “Thistuffakillyatinib” and it wouldn’t make a bit of difference – so long as it continues to work without any previously unforeseen large scale side effects and the accompanying class actions cropping up.

 

The one big question mark at this point; and one which doesn’t have too many informed investors and biotech experts worried given the timeframe, is the expiration of Humira’s patent in 2022 and the introduction of competing drugs. Since ABBV derives so much of their current income from this product, it is of course incumbent on them to develop replacement revenue drivers between now and then. Again, most analysts with whom I am familiar are bullish on the likelihood that this will indeed happen.

 

Market Data & Performance:

During the last one-year period this Large Cap stock has fluctuated between $55.06 (low) and $73.67 (high) with an average volume of 5,560,234, a current volume of over 9,000,000 and higher than average yield. The characteristic zigzag graph indicates rallies and reactions over the past five years, but the stock has trended generally upward in every year for which data is available since 2012. To further belabor the point, almost every new peak or trough has been higher than the preceding peak or trough through time, and the line-of-best-fit has a definitively positive slope.   ABBV has used about 58% of free cash flow to cover their past four quarterly payments which isn’t ideal, but far from abnormal. Price closed at $73.18 on June 22, 2017 and is currently trending down, but only by about 1% on June 23. Other mostly current stats are as follows:

  • Market Cap: 469B
  • PE Ratio: 18.97
  • EPS: 3.86
  • 6% yield

 

The company released its first quarter 2017 financial results and outlook at the end of April and it contained the following statement:

AbbVie is confirming its GAAP diluted EPS guidance for the full-year 2017 of $4.55 to $4.65. AbbVie expects to deliver adjusted diluted EPS for the full-year 2017 of $5.44 to $5.54, representing growth of 13.9 percent at the mid-point. The company’s 2017 adjusted diluted EPS guidance excludes $0.89 per share of intangible asset amortization expense and other specified items.

 

Paying down of the relatively high debt load has not, and looks to continue to not be a priority, which could mean that the C-suite is confident in the likelihood of continued future growth.

 

Looking Ahead:

To those of you with a particular interest in the cannabis market sector, AbbVie has had Marinol since 1985 and has over 30 years of research into cannabinoid compounds. Several experts have speculated that one path away from ABBV disproportionately heavy reliance on Humira and the dangers associated with the impending collapse of its veritable monopoly, would be in medical marijuana derivatives – the market for which is in the process of moving from $5 Billion in 2015, to over $20 Billion by 2020.

 

Conclusion:

 

Humira is facing existential competition, but not anytime soon. Toward weaning themselves from Humira, ABBV acquired rights to ½ of sales of Imbruvica, a cancer drug, in 2015 and it is joined in their oncology drug portfolio by Venclexta another novel cancer treatment drug. There are, again, many more products in the research phase.

Even if there is an overall market correction in biotech, it would affect all such stocks equally and probably hit the smaller companies harder – and given the increasingly positive reception to relaxed medical (and recreational) marijuana laws and the tax revenues that decriminalization and legalization would bestow at the state and national levels, it would behoove AbbVie to seriously consider this market vertical for continued research, development, and acquisitions. They have the benefit of their extensive previous research and the notion that the DEA simply has to be trending toward totally re-scheduling marijuana (and its derivatives); and we feel like they can afford to be; actually – they NEED to be very aggressive in pursuing innovations in this market.

 

Further, given Humira’s continuing status as the #1 revenue grossing drug on the planet, the next 3 or so years look promising as a mid-term investment – depending on how proactive AbbVie can be in staking out aforementioned (or currently unannounced) new market footprint(s).   Overall, in our opinion, the lower AbbVie trends toward the $60-65 threshold, the better the mid-to-long term bargain for investors and the more closely it should be followed.

Guess Who Picked Americas Carmart Inc. (NASDAQ:CRMT) Shares

In a just published Form 13, filed with the US Securities and Exchange Commission (SEC), Americas Carmart Inc. (NASDAQ:CRMT) reported that Magnolia Capital Fund, Lp has picked up 426,421 of common stock as of 2017-03-29.

The acquisition brings the aggregate amount owned by Magnolia Capital Fund, Lp to a total of 426,421 representing less than 5.5% stake in the company.

For those not familiar with the company, America’s Car-Mart, Inc. is an automotive retailer focused on the integrated auto sales and finance segment of the used car market. The Company conducts its operations through its two operating subsidiaries, America’s Car Mart, Inc. (Car-Mart of Arkansas) and Colonial Auto Finance, Inc. (Colonial) (Collectively, Car-Mart of Arkansas and Colonial are referred to as Car-Mart). It primarily sells older model used vehicles and provides financing for all of its customers. As of April 30, 2016, the Company operated 143 dealerships located primarily in small cities throughout the South-Central United States. Dealerships are operated on a decentralized basis. Each dealership is responsible for buying (with the assistance of a corporate office buyer) and selling vehicles, making credit decisions, and servicing and collecting the installment contracts it originates. Dealerships also maintain their own records and make daily deposits. The Company has both regular and satellite dealerships.

A glance at Americas Carmart Inc. (NASDAQ:CRMT)’s key stats reveals a current market capitalization of 267.91 Million based on 7.80 Million shares outstanding and a price at last close of $35.05 per share.

Looking at insider activity, there are a few transactions worth noting.

Specifically, on 2016-05-24, Von picked up 2,000 at a purchase price of $21.33. This brings their total holding to 10,000 as of the date of the filing.

On the sell side, the most recent transaction saw Henderson unload 10,000 shares at a sale price of $41.65. This brings their total holding to 76,984.

It’s possible to gauge a company’s potential by tracking the activity of its major holders, as well as checking in on insider activity such as those transactions listed above. We’ll be keeping an eye on Americas Carmart Inc. (NASDAQ:CRMT) as things move forward to see if its progress aligns with these transactions.

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Ancora Advisors is Buying Edgewater Technology Inc. (NASDAQ:EDGW) Shares

In a just published Form 13, filed with the US Securities and Exchange Commission (SEC), Edgewater Technology Inc. (NASDAQ:EDGW) reported that Ancora Advisors, Llc. has picked up 477,396 of common stock as of 2017-02-21.

The acquisition brings the aggregate amount owned by Ancora Advisors, Llc. to a total of 477,396 representing a 3.7% stake in the company.

For those not familiar with the company, Edgewater Technology, Inc. is a provider of transformational classic and product-based consulting services. The Company helps the C-suite drive transformational change through its selection of business and technology services, and channel-based solutions. The classic consulting disciplines (such as business advisory, process improvement, organizational change management, mergers and acquisitions (M&A) due diligence, and domain expertise) are blended with technical services (digital transformation, technical roadmaps, data and analytics services, custom development and system integration) to help organizations leverage investments in legacy information technology (IT) assets. It offers a range of consulting services, such as classic consulting and product-based consulting. In addition, it also provides synergistic services in the area of data management and analytics, such as enterprise information management services and analytics services.

A glance at Edgewater Technology Inc. (NASDAQ:EDGW)’s key stats reveals a current market capitalization of 82.45 Million based on 12.38 million shares outstanding and a price at last close of $6.61 per share.

Looking at insider activity, there are a few transactions worth noting.

Specifically, on 2016-12-15, Ranzal-Knowles picked up 11,645 at a purchase price of $6.72. This brings their total holding to 120,800 as of the date of the filing.

On the sell side, the most recent transaction saw Brewer unload 8,563 shares at a sale price of $5.36. This brings their total holding to 206,350.

It’s possible to gauge a company’s potential by tracking the activity of its major holders, as well as checking in on insider activity such as those transactions listed above. We’ll be keeping an eye on Edgewater Technology Inc. (NASDAQ:EDGW) as things move forward to see if its progress aligns with these transactions.

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Sarvadi Paul J. is Buying Insperity Inc. (NYSE:NSP) Shares

In a just published Form 13, filed with the US Securities and Exchange Commission (SEC), Insperity Inc. (NYSE:NSP) reported that Sarvadi Paul J. has picked up 1,505,797 of common stock as of 2017-01-31.

The acquisition brings the aggregate amount owned by Sarvadi Paul J. to a total of 1,505,797     representing a 7.2% stake in the company.

For those not familiar with the company, Insperity, Inc. (Insperity) provides an array of human resources (HR) and business solutions. The Company’s HR services offerings are provided through its Workforce Optimization and Workforce Synchronization solutions (together, its professional employer organization (PEO) HR Outsourcing solutions), which encompass a range of human resources functions, including payroll and employment administration, employee benefits, workers’ compensation, government compliance, performance management, and training and development services. In addition to its PEO HR Outsourcing solutions, the Company offers human capital management, payroll services, time and attendance, performance management, organizational planning, recruiting services, employment screening, financial and expense management services, retirement services and insurance services, many of which are offered through desktop applications and cloud-based delivery models.

A glance at Insperity Inc. (NYSE:NSP)’s key stats reveals a current market capitalization of 1.51  billion based on 21.28 million shares outstanding and a price at last close of $71.00 per share.

Looking at insider activity, there are a few transactions worth noting.

Specifically, on 2011-11-17, Lattanzio picked up 1,780 at a purchase price of $25.75. This brings their total holding to 52,087 as of the date of the filing.

On the sell side, the most recent transaction saw Feld unload 3,025 shares at a sale price of $71.86. This brings their total holding to 151,017.

It’s possible to gauge a company’s potential by tracking the activity of its major holders, as well as checking in on insider activity such as those transactions listed above. We’ll be keeping an eye on Insperity Inc. (NYSE:NSP) as things move forward to see if its progress aligns with these transactions.

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Vicon Industries Inc. (NYSEMKT:VII) is Attracting Smart Money

In a just published Form 13, filed with the US Securities and Exchange Commission (SEC), Vicon Industries Inc. (NYSEMKT:VII) reported that Gray Martin D has picked up 467,182 of common stock as of 2017-02-01.

The acquisition brings the aggregate amount owned by Gray Martin D to a total of 467,182 representing a 4.997% stake in the company.

For those not familiar with the company, Vicon Industries, Inc. develops video management software. The Company designs, assembles and markets a range of video systems and system components, including cameras, network video servers/recorders, encoders and mass storage units, which are used in security, surveillance, safety and control applications. Its product line consists of various elements of a video system, including cameras for image capture, stand-alone network video management system software and various video recording, storage, management, and output devices and peripherals. It also sells and/or produces other video system components, such as video encoders, decoders and monitors, camera lenses, housings and mounts, matrix video switchers and controls and various video transmission devices. Its focus is on the design of network video systems that it produces and sells around the world to authorized dealers, system integrators, government entities and security products distributors.

A glance at Vicon Industries Inc. (NYSEMKT:VII)’s key stats reveals a current market capitalization of 5.80 million based on 9.35 million shares outstanding and a price at last close of $0.600 per share.

Looking at insider activity, there are a few transactions worth noting.

Specifically, on 2014-12-22, Fullerton picked up 30,000 at a purchase price of $1.67. This brings their total holding to 230,000 as of the date of the filing.

On the sell side, the most recent transaction saw Roche unload 1,900 shares at a sale price of $0.79. This brings their total holding to 67,071.

It’s possible to gauge a company’s potential by tracking the activity of its major holders, as well as checking in on insider activity such as those transactions listed above. We’ll be keeping an eye on Vicon Industries Inc. (NYSEMKT:VII) as things move forward to see if its progress aligns with these transactions.

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Radoff Bradley Louis is Buying Cdi Corp. (NYSE:CDI) Shares

In a just published Form 13, filed with the US Securities and Exchange Commission (SEC), Cdi Corp. (NYSE:CDI) reported that Radoff Bradley Louis has picked up 1,501,000 of common stock as of 2017-02-03.

The acquisition brings the aggregate amount owned by Radoff Bradley Louis to a total of 1,501,000 representing a 8.0% stake in the company.

For those not familiar with the company, CDI Corp. provides engineering, information technology and staffing solutions. The Company operates in three segments: Global Engineering and Technology Solutions (GETS), Professional Staffing Services (PSS) and Management Recruiters International (MRI). It provides staffing services through its MRINetwork of franchisees. The GETS segment provides engineering and information technology solutions that involve the production of deliverable work products or services performed at its facility or at a customer’s facility. The PSS segment provides technical and professional personnel for discrete periods of time to augment the customer’s workforce in times of project, seasonal, peak period or business cycle needs.

A glance at Cdi Corp. (NYSE:CDI)’s key stats reveals a current market capitalization of 162.31 million based on 18.66 million shares outstanding and a price at last close of $8.65 per share.

Looking at insider activity, there are a few transactions worth noting.

Specifically, on 2016-09-27, Smith picked up 8,000 at a purchase price of $5.40. This brings their total holding to 69,272 as of the date of the filing.

On the sell side, the most recent transaction saw Giorgio unload 100 shares at a sale price of $15.96. This brings their total holding to 38,405.

It’s possible to gauge a company’s potential by tracking the activity of its major holders, as well as checking in on insider activity such as those transactions listed above. We’ll be keeping an eye on Cdi Corp. (NYSE:CDI). as things move forward to see if its progress aligns with these transactions.

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