Monday, July 28, 2014

Biotech Company Ready To Explode on Earnings - Medivation Inc (MDVN)

Medivation (MDVN) is expected to report earnings on Thursday, August 7th. This is the first quarter the company is expected to turn permanently profitable. Sales have grown over 60% the past five years and are expected to grow another 50% over the next three years. Earnings have been negative since the company's founding, but are expected to grow 50% over the next three years, with triple digit growth expected over the next four to six quarters. Analysts have been raising their estimates over the last sixty days.

The stock has spent the last twenty months essentially shuffling sideways after an initial 600+% advance from its cup shaped base breakout on November 3, 2011. The stock has advanced over 800% to its recent high in February, and is currently forming a well behaved, first stage, cup and handle base.

Our short term price target range is $110 - 120 and $160 - 200 over the next 12 - 18 months if the company can deliver and exceed sales and profit expectations, and breakout above the approximate $80 handle high in well above average volume. Aggressive traders could accumulate inside the handle. Protective initial stops should be placed around the $73 - 74 range.

Full Disclosure: Hold Position

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