Buy Bristol Myers Call Option on Oversize Dip

By Joe Duarte • January 20, 2017

I am recommending the purchase of the Bristol Myers March 17, 2017 Call Option with a $50 strike price (BMY_170317C005000). Aggressive investors should also use this opportunity to add to shares of the company or to enter a long position.

Shares of Bristol Myers (NYSE: BMY) fell this morning on news that the company would not be pursuing fast track approval of its cancer benchmark Opdiva for advanced lung cancer “based on current data.” The market interpreted this to mean that ongoing studies are not delivering expected results. This looks like a buying opportunity for longer term investors given BMY’s ongoing restructuring schedule and a history of beating earnings expectations. The company is due to report its most recent quarter’s earnings and to provide guidance on January 26th. I’ll have more in this Monday’s issue of BTP Weekly.

I have an options position in BMY

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Buck

01/22/17 ‐ 2:15pm ET January 22, 2017 at 2:15pm ET

Joe – Very interested in BMY call invest. Please give your thoughts on the following alternative.

* You recommend: Mar 17 $50 call Opt price $1.88
* Alternate method: Jun 16 $52.50 call Opt price $1.07

The latter enables buying twice the # of shares as the first at nearly the same price plus
you have 3 more months before expiration. Yes, you give up the $2.50 in strike price difference
but would quickly make that up if the stock rises as hoped for. Thereafter, you gain an ever increasing advantage in profit.

Buck

Joe Duarte

01/23/17 ‐ 2:03pm ET January 23, 2017 at 2:03pm ET

Thanks for your question and your subscription to the service.

I can see your point. However, I can’t give you more than that for an answer because it would be providing you with direct advice which requires a Registered Investment Advisor license. You should invest based on your comfort level and your level of experience.

greenmaster

01/27/17 ‐ 5:24am ET January 27, 2017 at 5:24am ET

Well the $50 Calls surely are not looking very good right now. I saw some kind of article on CNBC a few days ago about BMY being a take out Target? Not takeover. What do U know about this? Unfortunately, I did not get a chance to read the info. Could that be why the stock is heading south. Last week when the stock fell some 6 points, it fell on very heavy volume of over 70 Million shares. Do U still see this as good play to the upside? I bought some calls very lightly waiting to see if the stock would continue 2 fall. We all now know what happened? When to get back in is a mystery at this point? Please advise. Thanks.

Joe Duarte

01/27/17 ‐ 2:53pm ET January 27, 2017 at 2:53pm ET

BMY lost ground due to a set back with Opdiva, it’s leading cancer drug. For now I am holding firm on the stock. The option may be worth rolling in the next week or two. It looks as if the market is overlooking the potential for its arthritis drug Orencia and its overall restructuring plan.

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About The Author

Joe Duarte

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Dr. Joe Duarte is Chief Investment Strategist and Editor of Profit Catalyst Alert and Weekly Cash Machine. He has been a professional investor and independent analyst since 1990. He is a former Registered Investment Advisor and author of the Bestselling "Options Trading for Dummies," now in its 4th edition and several other books including "Market Timing for Dummies" and "Successful Biotech Investing". Although Joe's favorite areas of the market are technology and healthcare, he is a versatile investor who enjoys finding that hidden gem stock before the crowd, no matter what the sector. He is an original CNBC Market Maven, and is visible regularly on Stockcharts.TV. He has published articles on Marketwatch.com and has been widely quoted in the major media including The Wall Street Journal and Barron’s magazine.