Bookkeeping: Initiating Millipore (MIL) Position

Millipore (MIL) is yet another healthcare company that we are starting into this week. Company description as follows; company website here

Millipore Corporation, a life science company, provides technologies, tools, and services for bioscience research and biopharmaceutical manufacturing industry. It operates in two segments, Bioprocess and Bioscience.

1. The Bioprocess segment develops, manufactures, and sells consumable products and hardware, as well as provides related services used principally in the development and manufacture of therapeutic products.
   
2. The Bioscience segment manufactures and sells instrumentation, consumable products, and services used in drug discovery and other laboratory applications.

This is a solid, if relatively unexciting company - but it is in the "right" sector. With the right chart - in a word, it is "working". We see a double top breakout happening today, so in we go.

I found this name through J over at Marketfolly as a matter of fact - a few months ago he was showing a lot of hedge funds buying this name, along with a few others of similar ilk. I went to go look at the company back then and was uninspired. But fundamentals mean nothing and money flow means everything - so when the horde moves we are going to follow along with them. What kills you is the company had an ok earnings report - but a warning to guidance, yet the stock is being bid up. Meanwhile companies performing way above expectation but in the "wrong" sectors are being completely trashed. Ah, markets.

• Revenues for the second quarter grew 8 percent, to $414.2 million. Excluding an 8 percent benefit from changes in foreign currency, revenues in the quarter were unchanged from the previous year. (which in English means no growth at all)
• Millipore’s Bioscience Division revenues grew 9 percent, offsetting a 7 percent decline in revenues from the Company’s Bioprocess Division.
• Millipore’s second quarter net income grew 42 percent totaling $40.3 million, or $0.72 per share, compared to $28.4 million, or $0.52 per share in 2007. Non-GAAP net income grew 15 percent in the second quarter to $51.0 million, or $0.92 per share, compared to $44.4 million, or $0.81 per share, in the second quarter of 2007.
• Although we expect our Bioprocess Division and the overall company will report year-over-year revenue growth in the second half of the year, we do not anticipate spending from these large, U.S. biotech customers will stabilize until the end of 2008. Therefore, our Bioprocess results will continue to be negatively affected for the remainder of this year.

I find it all surreal but it is what it is... this is where the money flow is going. So to make any money we need to run with the herd.

We started this today with 1.4% stake buying in the upper $59s.

As an aside on a related healthcare note, earlier this week we bought generic drug maker Mylan (MYL). As we wrote in that piece, consolidation has been happening in the sector. Luck has not been with us of late, as the other major name in this space I was considering, Watson Pharmaceuticals (WPI) is up 10% since Wednesday on speculation of a takeover bid. Right sector, wrong company for us it appears. I flipped a coin and Mylan's chart was more appealing to me at the time.

• Options action on Watson Phamaceuticals (WPI) indicates that traders think it might be a takeover target, according to one options experts.
• "During the past month, call open interest -- which is the number of open call position contracts to buy Watson stock -- has increased 77 percent, so that tells us there's a rising litany of bulls on Watson Pharmaceuticals, and this is going to be an interesting stock to watch, even though there's not a specific rumor right now."
• Despite flattish share price action (shares closed flat at $28.35), call volume set a 52-week high Wednesday, with overall option volume coming in about 14 times the normal level.

As we've been saying, when it rains it pours - a 10% 2 day move in this space is akin to a solar company rising 80% in 2 days. Bah and humbug.

Long Millipore, Mylan in fund; no personal position