Buy Alert: Myriad Genetics (MYGN)

By Jim Pearce • August 11, 2016

TRADE INSTRUCTIONS

Date: August 11, 2016
Name: Myriad Genetics
Symbol: MYGN
Type: Open
Limit: Buy below $20 

TRADE TARGETS

Holding Period: 6 months
Average Return: 11.6%
Annualized Return: 23.2%
Stop Loss: $16.50

TRADE RATIONALE

Myriad Genetics is a molecular diagnostic company. The Company is engaged in the discovery, development and marketing of transformative molecular diagnostic tests that is designed to assess an individual’s risk for developing disease later in life.

This alert was triggered by Myriad’s undervalued balance sheet, which includes assets of $242 million while carrying no long term debt. The company has grown earnings-per-share by 215% over the past ten years, yet trades at low price-to-earnings ratio of less than 13 times annual profits.

With the entire healthcare industry undergoing extensive cost cutting due to the ACA (Affordable Care Act), more attention is being paid to companies like Myriad that can identify costly illnesses before they occur so less expensive preventative care can be employed. Myriad’s share just dropped by nearly a third as a result of reduced earnings expectations for the remainder of year due to the company’s announcement that it will acquire Assurex Health, but our Rapid Profits Matrix indicates that the market has overreacted and we should see a solid bounce in the months to come.c

Stock Talk

Comments Guidelines
Rick

Rick

I just joined last week and MYGN was priced above the recommended $20 price, but it is down today because someone downgraded it so took advantage of the dip and purchased it at $19.59. Any other new members may want too check it out.

Fernando Rodriguez

Fernando Rodriguez

Hi Jim, MYGN is down to $18.74. Do you think it’s a good idea to buy in this dip, or could it be a value trap? Thanks

Jim Pearce

Jim Pearce

It may drop a bit further on the Tesaro news (see comment above), but it isn’t clear to me that this development obviates the value of the Myriad test. If the Tesaro test was equally reliable for positive and negative outcomes then that could pose an existential threat to Myriad, but that does not appear to be the case.

DLD

DLD

With Tesaros phase 3 results do you think mygn is still a good buy

Jim Pearce

Jim Pearce

Yes. As noted by Insider Monkey, “The trial results from Tesaro’s experimental drug for ovarian cancer have questioned the need for a companion test made by Myriad Genetics. However, the benefits of Tesaro drug for patients which tested negative on Myriad Genetics test were much smaller than the benefits shown by positively tested patients.” That means there is significant cost savings for using the MYGN test to screen out low probability candidates, and cost cutting is the current trend in the healthcare industry.

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Thanks for the alert Jim. I just sold a covered call on AAPL, and now I have a new position thanks to your efforts!
Thanks

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Hi Jim,
I am asking a question, just to understand the nature of the alert email on MYGN. Its not a complaint, sometimes it helps to be obsessive, this was one of those times. I thought there would be a banner in bold color if there was an alert? I did see the alert in stock talk, so I am just wondering if it was a little
out of the ordinary, since I thought it would flash on other sites associated with this one?
Anyway I saw this and now have a position. :^)

Carol

Carol

Jim: I did not receive any email alert regarding the drop in price of the Myraid stock. If I hadn’t decided to read the stock talk I would have missed out. How do I correct the oversight? Thank you. Carol

Jim Pearce

Jim Pearce

Hi Carol. We only issue an alert when there is a change in advice on a holding, so there have been no alerts on Myriad since this initial buy alert. However, you can confirm the status of all of our holdings by consulting the ‘Open Trades’ portfolio table (http://www.investingdaily.com/systematic-wealth/portfolio/dynamic/open-trades/). Thank you.

Skippie2000

Skippie2000

Is myriad still a buy or should we wait for future alerts?

Jim Pearce

Jim Pearce

Yes, Myriad is still a buy until otherwise noted. Of the currently open trades, the only one I would caution you against is CALM since it has been trading very close to its stop price recently and may end up getting closed out soon if it doesn’t rally (http://www.investingdaily.com/systematic-wealth/forum/29057/use-of-stop-loss-limits-for-open-portfolio-positions/). Thank you.

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Hi Skippie2000,
I am just another member, but want to say welcome aboard, in my opinion there is no reason not to enter a position in LMAT. You can easily buy it in the area of price suggested, and look at the holding time we are certainly in that period. I joined very recently, and this was the first position I entered a trade on. Please note under a different area I made many comments that could be helpful to you last week.. If you go to the page with all the icons and search under the LMAT icon you can find this. I am only mentioning this to be helpful and hope it is.
Best Wishes

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Hi Sportfans,
Sure glad I bt some MYGN up nicely today.

Fernando Rodriguez

Fernando Rodriguez

Hi Jim, what is your view on MYGN after the latest quarterly results and the related stock decline?
Thanks

Jim Pearce

Jim Pearce

I am mulling that over, but be aware I have a stop loss price in place (based on closing price, not intra-day low) of $16.50 that it is flirting with so if it closes below then I’m selling it.

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