ABMD (Abiomed) Stay or cut losses?

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tricon23
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Joined: Sun Jun 23, 2019 5:33 pm

ABMD (Abiomed) Stay or cut losses?

Post by tricon23 »

All ABIOMED (ABMD) is a local company that I had my last individual stock in before moving to index funds. I had purchased X (no where near the 100K law offices require) in the spring and now it's down 50% and is part of litigation with investors. Should I pull the plug or wait out the storm? This $ is sitting for another 15 years before I need to access it.

Thanks!
livesoft
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Joined: Thu Mar 01, 2007 8:00 pm

Re: ABMD (Abiomed) Stay or cut losses?

Post by livesoft »

You have my permission to sell this loser stock and to blame me if it goes up after you sell it. Full disclosure: I know nothing about it except what you posted here in this thread.
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earlyout
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Re: ABMD (Abiomed) Stay or cut losses?

Post by earlyout »

Do you have anything other than your emotional attachment to this stock that makes you want to keep it?

The best question remains the same. If you had the equivalent cash today would you buy the stock?
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Wiggums
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Re: ABMD (Abiomed) Stay or cut losses?

Post by Wiggums »

I’d sit on the stock since there are a lot of positives. Unfortunately, it looks like you paid close to $300/share, so you’ll need continued growth and more medical devices in the pipeline. I wouldn’t buy any more shares.

Revenue grew 15% to $207.7 million. That was shy of the $210.7 million that Wall Street had expected.

Gross margin dipped 80 basis points to 82.1%.

Operating income grew 30% to $60.7 million, which represents a 29.2% operating margin.

Adjusted earnings per share were $1.00, which was $0.03 ahead of the consensus estimate on Wall Street.
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grabiner
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Re: ABMD (Abiomed) Stay or cut losses?

Post by grabiner »

Since the stock is down from when you bought it, you will get above-market returns for selling it and putting the money in an index fund. You will get the returns of the stocks in the index fund, but you will also get a capital loss which you can deduct from your taxes (offsetting any capital gains, or $3000 per year in ordinary income).

Therefore, you have a lower expected return from holding the current stock than I would from buying an equal amount of the stock. If there is no reason that I should buy the stock, then it is clear that you should sell.
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michaelsieg
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Re: ABMD (Abiomed) Stay or cut losses?

Post by michaelsieg »

They were one of the best performers in 2018 with the stock price more than 100% up and now the price is back to where they started in 2018. You definitely bought the stock near it's peak after a remarkable run over several years. I don't hold individual stocks, and don't think one should buy individual stocks unless you do a lot of home work, read their financial statements and understand the market and their competition and buy for the long run. I know the leadership of the company and they are good if not excellent in their field, but mechanical circulatory support is a really high-risk field in medicine (and investing), minor regulatory adjustments/reimbursement changes can have a dramatic impact on their revenue and change everything for the stock holder and litigation and adverse medical trial results are substantial risks as well. I can't give you good advice, but I probably would stick to my initial decision and just keep holding the stock, I assume you bought them for the long run and your guess is as good as anyone else's about how they will do as a company.
Good luck!
bberris
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Re: ABMD (Abiomed) Stay or cut losses?

Post by bberris »

Would you buy it now if you didn't own it? There's no difference between buying and holding (except for taxes owed); you own it either way. The stock does not remember what price you paid and has no interest in how much money you make or lose. As Grabiner noted, there are likely to be tax advantages to selling a loser.
Trader Joe
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Re: ABMD (Abiomed) Stay or cut losses?

Post by Trader Joe »

tricon23 wrote: Thu Sep 05, 2019 6:39 am All ABIOMED (ABMD) is a local company that I had my last individual stock in before moving to index funds. I had purchased X (no where near the 100K law offices require) in the spring and now it's down 50% and is part of litigation with investors. Should I pull the plug or wait out the storm? This $ is sitting for another 15 years before I need to access.

I highly recommend that you cut your losses with Abiomed asap.
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