OptionsHouse

Options Trading News

October 2, 2013  Wed 8:11 AM CT

CELG: SEE CHART GET CHAIN FIND STRATEGIES
Celgene and Merck are crosstown rivals. One's always innovating, putting money to work in a variety of biotechs, buying when the time is right. It's always going for the blockbuster, trying to press, press, press.

The other is trying to cut its way to success by firing, trimming, and hoping to eke out money as its new products fail to ignite or just fail. It's unoriginal and staid--just trying to pay that dividend.

The first is obviously Celgene, and the second is Merck, which managed to pop its stock with an announcement that is laying off a bunch of people. It's a second reduction in force for this obviously bloated company.

TheStreet.com logoBut the first used to be Merck. It used to be the ultimate in original thinking and new products. Not anymore. Even its acquisition of the gigantic Schering-Plough in 2009 seems to have gotten it nothing significant that I can see. I had hoped that at least the company would follow in the footsteps of Pfizer and spin off animal health, but even that is apparently too radical.

Either way, I think that Merck's a sell, not a buy. The market wants growth and new drugs. If it wants yield, it can get it from Con Ed. Disappointing, again.

Disclosures:
Cramer's charitable trust has no positions in the stocks mentioned.
Share this article with your friends


Related Stories

CELG

Put trade follow downtrend in Celgene

June 20, 2016

The drug developer has declined steadily for more than a week, and one large trade is positioning for more potential losses.

OptionsHouse

Premium Services

Education & Strategy

The Movement of Delta

In our last column, we spoke about delta. You might remember that we discussed what delta was and what factors affected or changed delta. As you recall, we stated that three factors will have an effect on delta. They were movements of time, volatility, and underlying price. Today, we want to take a further look into the change of delta, this time focusing on change due to the movement in the underlying price. 

View more education articles »