Thursday's Big News: ACRX, WMT, and TEVA Under the Microscope

Nov 15, 2012 7:55:09 AM PST | 297 View(s) | No Comment(s) - Post a Comment Rating

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StockHQ:

WMT
$74.95 $0.00 0.00%
TEVA
$39.32 $0.00 0.00%
ACRX
$9.92 $0.00 0.00%

It may not be the only news for Thursday, but let's face it - Teva Pharmaceutical Industries Ltd (NYSE:TEVA), Wal-Mart Stores, Inc. (NYSE:WMT), and AcelRx Pharmaceuticals Inc. (NASDAQ:ACRX) are certainly giving us the most important news of the day. Here's what you need to know.

In simplest terms, November is going to be a month Teva Pharmaceutical Industries Ltd will be glad to forget. It started on the 2nd when TEVA began to be probed by the Department of Justice as part of a bribery investigation. On the 8th, Canada took away Teva's patent on Viagra. On the 13th it was announced that the company may face a lawsuit for concealing the salaries of key executives. Ugh. None of them are the kind of thing investors want to see, and to see them all pile on collectively has pushed the stock from a high of $41.98 to yesterday's multi-week low of $38.44.

So what's that got to do with TEVA today? Because, as miserable as those things seem on the surface, the forward-looking P/E of 6.9 more than offsets them, and value-seekers are starting to talk. In fact, Teva Pharmaceutical Industries shares have given us an inside day reversal (so far), suggesting the slingshot action is already underway.

Is it possible that Wal-Mart Stores, Inc. isn't infallible after all? Last quarter's numbers would certainly suggest that. The world's biggest retailer earned $1.08 per share in Q3, easily topping the year-ago number of $0.96. Problem is, the pros were expecting WMT to earn $1.07. Overall next sales were higher by 3.4%, and same-store sales rise 1.5%. That's the fifth time in a rose same-store sales were up.

So, aside from the fact that earnings fell short of estimates, why are WMT shares off by 5% today? After all, earnings still grew by 10.4%. Two reasons. One is, the retailer also reeled in its fourth quarter outlook to levels below what analysts had previously forecast. Two, in the game of investing, perception means far more than relative results. Wal-Mart Stores are still THE dominant force in retailing, but today - and until further notice - traders have decided to see the glass as half empty.

Last but not least, AcelRx Pharmaceuticals Inc. shares are up 26% today on the heels of news that a Phase III trial of a Sufentanil NanoTab PCA system met its endpoint goals as a self-dosed pain management tool. Considering it's an alternative to morphine (morphine works, but creates even more significant problems), ACRX deserves to trade higher. That doesn't mean the stock's buy-worthy after the fact, however, particularly when you look at the chart's history.

Though less than two hours into the trading day, ACRX has already pulled back from its high for the day. In fact, as it stands right now, the day's bar is a doji (with the open and close right in the middle of the day's range), which often materialize at pivot points. Indeed, this chart's last two clear doji bars were pivot point, for better, and for worse. Throw in the fact that AcelRx Pharmaceuticals added a big fat bullish gap into the mix with this one, and the odds of a downside reversal are further enhanced.

Bryan Murphy is a paid contributor of the SmallCap Network. Bryan Murphy's personal holdings should be disclosed above. You can also view SmallCap Network's complete disclaimer and disclosure.