How far
Myriad Genetics (MYGN) has fallen - this had been one of the star stocks of the last 12 months as it seemed to do no wrong. In fact during 2 of the worst swoons in market history (Sep-Oct 08, and Jan-Feb 09) the stock held its ground and/or advanced! But the past few months have not treated it kindly. Last night after the bell Myriad came out with a "slight" revenue warning - $86M for fiscal fourth quarter (analysts had estimated $91.6M as consensus); so a 6% shortfall. This miss takes them to a $326M year versus prior guidance of $330M, and analysts $336M.
For that the stock was down 17%+ in after hours yesterday. It seems overdone but a few issues here (1) this is the second "miss" by management in a short period of time (2) the stock has been expensive even with the dramatic drop since late winter and (3) we really have to start questioning if someone on the inside is leaking information out.
To that last point in late April (when I owned MYGN)
I cut back the position sharply when I saw a sharp spike in volume 10 days ahead of earnings. 10 years ago it would of meant nothing to me, but the chicanery on Wall Street is now a lot more easier to pick out. I now always get suspicious of this sort of activity even if the idealist in me still wants to believe there is some even playing fiele... I wrote then:
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.
And of course you know how the story ends (
May 4, 2009: Myriad Genetics Slight Miss on Revenue; Beats on Earnings) So as the "people with the right connections" were getting out in the mid $40s during those high volume days in latter April, the inside information-less enjoyed a $31 print in after hours.
Why do I bring this up? Last Friday there was a MASSIVE surge in volume in
Myriad Genetics (MYGN)... 2 days ahead of a warning. Now let's be fair - Friday was a wacky day as it was the annual Russell rebalancing act, as some 400+ stocks got moved in and out of indexes.
