Myriad Generics (MYGN) Slight Miss On Revenue; Beats On Earnings
As always, you can tell a lot from the stock price action ahead of earnings because in the nearly SEC free Wild Wild West atmosphere "those in the know" act before you will. Myriad Genetics (MYGN) has been weak for the past two weeks, falling below the 50 day moving average 2 weeks ago on 3 days of high volume selling (see those 3 big red bars in the volume column in late April?). Ding ding - we have a winner; the "important people" were exiting the stage starting in the $44s....
Luckily for us, we know this game is not fair and balanced from years of seeing this same pattern & cleared the exits .. I had taken Myriad exposure
down on April 23rd and this is what I wrote
Strange action in Myriad Genetics (MYGN) - I am conflicted over what to do here. The cynic in me says with the company reporting earnings the first week of May, with 3 days in a row of huge volume and terrible price action someone with inside information is getting out. (not that this ever happens on Wall Street).
...with such high volume out of the blue... and knowing how Wall Street
works with the asleep at the wheel SEC - this level of drop on this much volume has me going the 'better safe than sorry' route especially with such an expensive stock. So I'm going to reduce the position from a 1.6% stake to 0.6% with a sale here in the $37.30 range. If I'm wrong, all we lost was some opportunity at profit - with a forward PE >40 and a chart "talking" like this, I will err on the side of caution.
I see an ask now in after hours around $31 so we saved a few bucks by "sizing" the position appropriately, but the important people who got out in the mid $40s are the ones chuckling to themselves right now.
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