Updated on Dec 30, 2018.
BMY Stock Strategy Review
Bristol Myers’ Cancer Fighters
BMY has 3 FDA events in 4Q18 / 1Q19 for their suite of cancer-fighting drugs:
- ~ DEC27 – Empliciti (Elotuzumab) for cancer affecting blood
- ~ DEC29 – Sprycel (Dasatinib) for cancer affecting blood and bone marrow (Ph+ CML)
- ~ FEB28 – CM-227 – Opdivo + Yervoy for skin cancers
All these are catalysts that may push the stock higher and on the flip side, potentially sink the stock. Yes, biotechnology stocks are high risk and high reward! Read on and we will show you our approach that would retain the high reward portion but limit and minimize our downside risk to only a couple of dollars per share or less.
BMY Low Risk Trade
On 10/5/18 when BMY was trading around $62, we have entered to play the upcoming catalysts with the following risk/reward profile:
- Maximum gain: Unlimited
- Maximum loss: limited to $2.72 per share
The actual trade setup and exit plan are available in our members only area.
On 10/22/2018, according to StreetInsider.com, Citi downgraded Bristol Myers from a ‘Buy’ to a ‘Neutral’ taking the stock price target from $62 to $57.
Here is what the BMY chart looked like after the downgrade:
Why did Citi downgrade BMY? We believe the main reason is FDA’s decision to extend the review of one of their lung cancer drugs Opdivo.
Regardless of the reason, this downgrade had caused a $13 depreciation in BMY (from a high of $63.70 to the current price of $50.88). If you had owned the stock at it’s high, for every 100 shares the losses would have been $1,300. Alternatively, had you applied our strategy, the losses here was limited to only $2.72 per share or $272 per 100 shares, even if BMY had dropped to $0!
Now that BMY’s stock is trading at $50.88, we will look to obtain more shares, now at a much-discounted price, by applying our ‘Name Your Price’ strategy in the coming weeks, so stay tuned!
Minimal Loss & Maximum Gain Strategy
If you would like to learn more about our limited risk strategy, please contact us now on our approach and our 1 on 1 coaching services.