Biogen Inc (NASDAQ: BIIB)
Biogen is one of the largest biotech companies in the world. Unfortunately however, this giant produced a poor earnings report; and it’s stock is paying the price. In just a few days, the value of BIIB shares fell by nearly $50 per share! However, I mentioned in a recent post that I think we’ve reached the floor; and looking at the chart today, it’s becoming more clear. So, let’s take a look at what we’re seeing today, why I think that we’re going to see a breakout soon, and why I believe that fundamentally, Biogen is still a solid long term investment option.
We’re Starting To See A Recovery
Yesterday, Biogen had a relatively good day. It climbed in value from $374.68 to $383.78 by the end of the day. As you know, price movement in the market is a series of overreactions; especially in the biotech market. So, after reaching a high yesterday, we started to see a correction toward the end of the day bringing the value of the stock from an intraday high of $387.32 per share to the closing price of $383.78.
Wait, Wait, Wait! We’re at a loss today, how can that be considered a recovery?
As mentioned above, it’s incredibly important to remember that the movements in the market are trends caused by extreme overreactions to everything from price movement itself to news and earnings reports. With that said, the current downtrend started as a correction to yesterday’s overreaction, but became an overreaction in itself. So, we should expect to see the stock start moving in the positive direction soon to compensate for today’s overzealous losses.
Why I Think Biogen Is A Great Long Term Investment
OK, so this may not be the best time to tout bullish concepts around Biogen, considering the miss we recently saw in earnings. However, I think the miss is more of a bump in the road; and no matter how big or small a company is, they will eventually deal with a bump in the road. So, it’s important to remember who Biogen is as a company and what they’ve proven in the past. For example, the last earnings report we saw was a smash hit! The company absolutely smashed earnings projections. In the past, that’s what they’ve been known for doing. With that said, I’m not going to lose faith in one of the strongest companies in biotech because they had a hiccup. If all investors did that, Amazon would be bankrupt! In my opinion, we should see growth in the long run.
What Do You Think?
Where do you think BIIB is headed and why? Let us know in the comments below!