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Ticker Shock: Bristol-Myers Feeling Effects of Plavix


Monday's top stories and stocks with potential to move.


Well, what was supposed to be a weekend filled with kids soccer turned into a partial wash out. So the family and I spent the better part of Saturday watching movies, reading, and playing Wii. Sunday was spent running errands. Exciting, huh?

Asian stocks sank overnight. The Hang Seng and the Nikkei were down 1.86% and 0.4%, respectively. Europe was slightly in the red earlier this morning. And here in the US, we're currently trading lower.

Here's what I'm seeing this morning:

Bristol Myers Squibb (BMY):
Bristol shareholders might want to pop a pill (well, not literally).

According to an Associated Press article on Sunday:

"Researchers followed 18,624 patients worldwide from 2006 to 2008. About half the patients were taking clopidogrel, also known as Plavix, while the other half were taking an experimental drug called ticagrelor, or Brilinta, made by AstraZeneca PLC (AZN). Those on Brilinta had a 4.5% chance of dying, versus a 5.9% death risk for patients on Plavix, the world's second-best selling medication made by France's Sanofi-Aventis SA (SNY) and US drugmaker Bristol-Myers Squibb Co."

I suspect this news may have an impact on Bristol's trading early on in the session.

My thoughts:

1. If Bristol does come down on the news, its something I'd want to keep my eye on. Overall, I like this company and believe there's ultimately upside potential here in spite of the news.

2. That said, might Plavix lose a portion of its mojo because of the news? Might future estimates come down as a result? I'm not sure, and it's something I'd like to get a feel for first.

3. I'm noticing that the dividend looks like two doses of love, so that's something I'm keeping in the back of my mind.

J. Crew (JCG):
On Friday, the retailer got a little pop. The reason: Its second-quarter results. In case you missed it, the company put up $0.29 whereas the Street had been expecting $0.15. It beat on the top line, too.

Some thoughts:

1. This company had a heck of a run over the last several months, as evidenced by this chart, and I'd be extremely reluctant to chase right now. Also, it trades at more than 34 times this year's estimate, which seems a bit steep, too.

2. I'm also wondering if the company will be able to keep up the positive surprises on the earnings front. They've done a great job exceeding expectations over the last year, but I'm skeptical that it can keep that up. Any stumble and it could get pummeled.

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No positions in stocks mentioned.

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