One might be tempted to think of the above (click to enlarge) as profiting from an irrationally-pessimistic market scare. That scare, in mid-August, ran NYSE- and NASDAQ-wide.
Even so, it is true that Mr. Frazier bought 32,000 shares, or nearly $1 million worth of Merck common stock in the open market, at around $31. CFO Peter Kellog bought 15,800 shares, or about $500,000 worth at around the same $31 low watermark.
With the scare passing, these look like very opportune buys -- and while they reflect confidence in Merck (during a rough patch), financial analysis would reveal that there was very little risk of a catastrophic loss for the two investments.
In fact, each trade is now up about 8 percent (at $33.50), in about 15 days -- and that works out to an annualized return of around 196 percent. . . very little risk, for very big returns, that. Just the same, Merck is intrinsically, inexorably north of a $30 stock. And -- as the above chart shows -- Frazier and Kellog know it.
Thursday, September 1, 2011
In August 2011, Both CEO Frazier and CFO Kellog Bought Significant Stakes At Around $31. . .
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3 comments:
So, outsouring is all the rage nowadays, except when it comes home to roost?
http://www.pharmalot.com/2011/09/merck-sues-kentucky-for-outsourcing-vioxx-suit/
Indeed.
Nice pickup!
Namaste
Now we also know why Kohan sold his 3 mil in stock at peak. Bye-bye Raul.
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