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WEEKLY INVESTMENT OUTLOOK (25.11.2019)

EQ FUND

MEDICINES CO. (MDCO): BUY

Sector: Healthcare          Industry: Pharmaceuticals

The Medicines Company is a global biopharmaceutical company. The Company is focused on advancing the treatment of acute and intensive care patients through the delivery of medicines to the hospital marketplace around the world. It markets Angiomax (bivalirudin), Ionsys (fentanyl iontophoretic transdermal system), Minocin (minocycline) for injection and Orbactiv (oritavancin). It also has a pipeline of products in development, including Carbavance, inclisiran and MDCO-700. Carbavance is used for the treatment of hospitalized patients with gram-negative bacterial infections. Inclisiran is used for the treatment of hypercholesterolemia. MDCO-700 includes sedative-hypnotic, which is used to induce and maintain sedation for procedural care and general anesthesia for surgical care. In addition to these products and products in development, it has a portfolio of generic drugs.

Trading Statistics

Market Capitalization: 5.465B

Shares Outstanding: 79.608M

Average Volume: 3.638M

MDCO DAILY CHART

Recommendation, why?

According to Reuters, Swiss drugmaker Novartis (NOVN.S) is betting on heart drug prospect inclisiran in a $9.7 billion takeover of The Medicines Co (MDCO.O) as it challenges cardiovascular medicines from Amgen Inc (AMGN.O), Sanofi (SASY.PA) and Regeneron Pharmaceuticals (REGN.O).

Novartis is paying $85 per share in cash, a 24% premium over The Medicines Co’s closing price of $68.55 on Friday, to acquire the U.S. biotechnology company’s lone drug, the cholesterol-lowering injection inclisiran. This makes MDCO a perfect candidate for one of our special situations model.

BOEING CO (BA): BUY

Sector: Industrials          Industry: Aerospace & Defence

The Boeing Company is an aerospace company. The Company’s segments include Commercial Airplanes; Defense, Space & Security (BDS), such as Boeing Military Aircraft (BMA), Network & Space Systems (N&SS) and Global Services & Support (GS&S), and Boeing Capital (BCC). The Commercial Airplanes segment develops, produces and markets commercial jet aircraft and provides related support services, to the commercial airline industry. The Commercial Airplanes segment also produces commercial aircraft and offers a family of commercial jetliners. The BDS segment’s operations involve research, development, production, modification and support of the products and related systems. The BMA segment is engaged in the research, development, production and modification of manned and unmanned military aircraft and weapons systems. The BCC segment’s portfolio consists of equipment under operating leases, finance leases, notes and other receivables, assets held for sale or re-lease and investments.

Trading Statistics

Market Capitalization: 208.9878B

Shares Outstanding: 562.789M

Average Volume: 5.248M

BA DAILY CHART

Recommendation, why?

Boeing has proven to be an event/news driven stock in the last couple of months especially with backlash surrounding the crisis the company is currently facing with the 737 Max.  Crisis, analysts are expecting the company to find a lasting solution to in coming months as the time expected to resolve the issue has been significantly cut down as communicated in the company’s December 2019 forecast. Though a more conservative timeline is March 2020. The current price depression gives room for entry for a long position as the company despite good share price performance in the last 1 month is yet to hit its pre-crisis high of February 2019. A lifting of the grounding order could allow for deliveries to resume and would help the manufacturer start working through the logjam of jets that have built up in inventory since inception of the crisis.

DZC Capital Research Team

Author DZC Capital Research Team

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