Outperform -- Price 63.19 on March 17
by Baird Securities

Target: 80. CEPH's Nuvigil had statistically significant efficacy as an adjunctive therapy to mood stabilizers in a Phase 2 bipolar I depression trial...Top-line safety/tolerability was comparable to placebo...We apply a price/earnings ratio of 14 (group average recently in range of 15 to 20 times, historically 20 to 30 times) to our 2010 estimated earnings per share....The discounted multiples represent those recently awarded by the market. Market cap: $4.9 billion.

Maybe the difficulty in reconciling Helene Meisler's view on the NASDAQ to Doug Kass's view on the NASDAQ (link) is biotech!
Helene doesn't like the Nazz, thinks it is about to roll over. Doug's on board -- he likes the action and is long.
Perhaps the difference in views is that I am thinking of this index as tech when I should be thinking of it as biotech -- namely Cephalon (CEPH), Genzyme (GENZ), Celgene (CELG), Gilead (GILD), Biogen (BIB), Amgen (AMGN) and Sepracor (SEPR) plus a bunch of other healthcare players.
The Nazz has the benefits of almost no banks, lots of techs with big cash positions and these biotech wonders that have acted fabulously since the year began.
Sometimes an index isn't what it seems. The biotechs, subliminally, may be the reason why the Nasdaq rallied even on this awful day. I predict continued outperformance by biotech in this world of zero interest rates. So, tie goes to Dougie!
Random musings: Good discussion with Jeremy Siegal and Jack Bogle on Street Signs today, with Jeremy pointing out that dividend stocks have held up but Jack noticing growth stocks are up more. In reality, both have been losers... Tim Geithner and the ProShares UltraShort Financial (SKF) destroyed the banks this week. I will have more SKF data on Monday that shows how much the shorts had to do with this move down.

4

Technicals and Fundamentals

Don't forget that the whole group is running, including Biogen (BIIB), as the B section of the Journal shows, and Cephalon (CEPH), which seems like nothing but net lately.

Cephalon (CEPH) was upgraded from Neutral to Buy, Merrill Lynch said. Stock is trading at a low valuation, already pricing in poor prescription trends. $73 price target.

Cephalon (CEPH) was upgraded from Market-weight to Overweight, Thomas Weisel said. $77 price target. Company has endured several negative milestones and its base business remains intact. Pipeline also has big potential.

Cephalon (CEPH) was downgraded to Underweight, Morgan Stanley said. $54 price target. Company faces more significant challenges down the road. Near-term prescription trends are also weakening.

FBR said it is upgrading Cephalon (CEPH) to an Outperform rating and raising its target price to $97. Market opportunity for Treanda is not fully appreciated.

great promise.

unable to time properly

WARNING