The back story: A month ago, Portola Pharmaceuticals (PTLA) received FDA approval for BevyxXa, an oral treatment for deep-vein thrombosis and pulmonary embolisms that is the company’s primary pipeline drug.

Shares went up 50 percent, management said it expected a billion dollars in revenues resulting from the drug, Citibank upgraded its price target to $78 per share, and I said we’d see a run of upgrades, all with targets in the $70s.

While I was not – and am not – in the stock because this trade was a long-term play and not a day-trade in my wheelhouse, I suggested buying the stock below $60 per share, expecting a $70 stock in six to 12 months.

How it played out: In the month since, Portola is up more than 15 percent, and the stock is marching steadily. The company is doing everything right and the share price is reflecting it.

What’s next: I expect to see the stock hit $72 before year-end, if not sooner, but ultimately I believe this one eventually sees $100 per share. It won’t be overnight – though it will be inside of five years — but I think Portola is going to be a major biotech player for years to come.

Growth in PTLA will slow. The stock is up about 70 percent in three months and nearly 200 percent this year. That pace won’t continue, but for a long-term investor looking for steady growth, this remains an obvious opportunity.

The play from here: Don’t chase this stock. If you buy up here, you’re chasing; while that could end up being profitable – I’m expecting the stock to keep rising, after all – chasing is bad practice.

If the stock reverts or retraces, a long-term investor might buy if the dip gets to the $60 range, but stick to your discipline, especially with a stock as volatile as this one.


   Taylor Conway is the lead day trader at PennyPro.com. He is a short-term day trader of stocks and ETFs.  At the time this article was published on RagingBull.com, he had no open positions, options or orders in PTLA, has never held a position in the stock, and was not planning to buy or trade it.

Author: Taylor Conway

Taylor’s Shadow Trader system allows his subscribers to tap into the hidden corners of Wall Street and to capitalize on “dark pool” trading activity. This powerful "follow the big money" strategy uncovers large trade activity that most regular investors have no access to, but that Taylor’s subscribers receive alerts about. Starting with a small account and trading part time, Taylor rapidly built his personal trading millions using his own proprietary trading systems. Sharp, savvy, and highly driven, Taylor looks for profits in any market condition, bull or bear.

Learn More

Leave your comment

Related Articles: