Stocks hit their two and a half year highs today as confidence in the markets skyrockets thanks to hackers penetrating NASDAQ computers (proving if you drink enough red bull and vodka, you’ll penetrate anything), insider selling continuing to outpace insider buying at a cockposterous rate as company executives show as much faith in their businesses as Egyptians showed faith in Mubarak or the Sheyla Hershey showed faith in moderation (or her personality), and commercial mortgage securitizations start to get shittier than a Black Eyed Peas halftime performance.  Oh wait, those three things all point to why investors shouldn’t have confidence in the markets, but fuck logic and just buy the fucking rip.  (Sidenote: Money McBags isn’t saying the Black Eyed Peas don’t have any talent, he’s saying that they don’t have talent and they cause more visits to otolaryngologists than tinnitus.  Shit, they sounded so fuck awful that even Marlee Maitlin put her TV on mute).

That said, there was little macro news out today as data is still recovering from the excitement of yesterday’s Super Bowl where apparently it had to drink every time Ben Roethlisberger raped someone, including Steelers fans with the interceptions he threw.  The only real news was that consumer borrowing rose for the 3rd consecutive month as Americans run up debt so they can pay it back with inflated dollars later (just kidding, people are way too fucking stupid to do that, instead they have likely exhausted their unemployment checks and are now fraudulently charging everything to the Underhills).   Credit rose by $6.1B to $2.41T after increasing a revised $2.02B in November as people load back up on debt in their attempts to reinflate the bubble before it bursts again (it did burst, right?).  Elsewhere, President Obama wants to lower the corporate tax rate and eliminate tax loopholes to pay for that and Money McBags is all in favor of getting rid of ridiculous tax loopholes such as the “Double Irish,” the “Dutch Sandwich,” and the lesser well known “Lithuanian Typewriter.”  If Money McBags were in charge, first he would hire Jessica Bratich as his undersecretary focusing on taking dictation, and second, he would have all businesses pay the same rate unless they were really asshats, like Blackwater or Al Sharpton.

Internationally, not much happened other than the Middle East going through some growing pains that Alan Thicke likely won’t be able to solve and a weak German manufacturing report which caused the Euro to continue to slide like Mervyn King’s reputation and Kirsten Dunst’s chin.  Germany’s government said factory orders fell by 3.4% in December led by weak demand for new vehicles, a 9% drop in demand for German goods in developing countries, and an oxymoronic shortage of large orders.

The real news of the day though was M&A as Danagher bought Beckman Coulter for $6.8B, EnsCo will acquire Pride international for $7.3B (forming the world’s third largest driller after Transocean and Lexington Steele), Sanofi-Aventis may buy Genzyme for $20B and a disease to be named later, and AOL bought The Huffington Post for an absurd $315MM as apparently it’s 1999 again and internet properties are all worth a Google.  At the same valuation per user as what The Huffington Post received, the award winning When Genius Prevailed would be worth ~$1MM (no fucking joke, so any interested buyer should shoot Money Mcbags an email at moneymcbags@gmail.com and we can negotiate up from there), Angry Birds would be worth $500MM, and the life-changing and back from the dead NSFW Guess Her Muff would be worth infinity (because really, you can’t put a price on happiness).  The point of all of this is companies are sitting on cash and as their earnings are all about to stagnate with input prices rising and an inability to initially pass costs on to the consumer (because um, the average consumer can’t afford shit), buying revenue and earnings is going to be the best growth strategy other than watching Trisha Brill movies or coming to terms with their pasts.  Companies could take the excess cash and invest in R&D or hiring people, but that would mean they thought the economy is getting better, so consider the signal received.

Finally, in earnings Loews’ profit rose 16% as their insurance unit CNA Financial saw earnings surge 23% and reinstated their quarterly dividend as they apparently insured the fuck out of some shit.  And Apple rose after brokerage firm Susquehanna raised its price target on the company to $465 from $445.  Just kidding, we all know Susquehanna’s analyst has as much effect on Apple stock as whistling has on gravity or grammar rules have on a Palin.  Apple stock was up simply because the market was open.

In small cap news, Money McBags wants to dig in a bit to old favorite QCOR here as the stock dropped ~7% on a complete hatchet job by some mentally deficient dickbag at Barron’s who wrote one of the most intellectually bankrupt pieces Money McBags has read since he skimmed the first paragraph of a Chuck Klosterman essay.  To read the article, you need a subscription to Barron’s and since the advent of Spankwire, Money McBags no longer buys subscriptions to anything, so he can’t link to the article here.  That said, someone on the Yahoo! message board for QCOR posted the whole column, so fuck you very much Barron’s.

The gist of the column is that QCOR is fucked because they will now have to reimburse medicaid patients 100% of the cost of their drug Achtar and this will cause them to raise a fuckload of reserves, at least according to some guy named Mark Roberts at some dickbag paid research firm specializing in shorts.  Roberts then goes on to claim that Achtar growth in MS will slow “after some doctors and patients try the $50,000 treatment after failing with the standard treatment of methylprednisolone, which costs less than $1,000.“  And then the column ends by trying to point out people associated with QCOR 10 years ago were somehow fraudulent with some Italian pharma company transactions 7 years before owning QCOR.  Unfucking believable.  It’s like blaming President Obama for Watergate or the current head of ABC for Cop Rock.

So lets just look at these points individually:

1.  The 100% rebate is going to cause a reserve boost and kill profitability.  The only factual part about this statement is that QCOR does have to reimburse 100% of the cost of Acthar for medicaid, but, and make sure you are all sitting for this because it is a good one, THEY PREVIOUSLY WERE FORCED TO REBATE 110% of THE DRUG.  Yeah, they closed a fucking loophole months ago that had them reimbursing more than the actual price of the drug so um, having to reimburse a lower fucking price actually helps their margins.  So claiming the big federal overhaul to health care is going to fuck with QCOR’s reimbursement is more misleading than calling Keely Shaye Smith a bit full figured or Charlie Sheen a bit of a drinker.

As for the reserving, QCOR already upped the fuck out of their reserves about a year ago to handle this shit and will be adding another $2.6MM of reserves in Q4 (and that will be on ~$46MM of sales, so not a fucking deal breaker, ~$.03 per fucking share).  Money McBags used to talk with their CEO quite a bit when Money McBags worked for the man on the buy side and the CEO is one of the most straightforward, no-nonsense, not full of shit, shareholder friendly CEO’s Money McBags dealt with so Money McBags doesn’t believe the CEO would somehow be “under reserving” based on his current information.  Oh, and by the way, fewer MS patients use medicaid and as that market grows for QCOR, these fucking reimbursements become less material.

2.  As for growth in MS to slow “after some doctors and patients try the $50,000 treatment after failing with the standard treatment of methylprednisolone, which costs less than $1,000,” does that statement even complete the thought?  Either the copy of the column posted on the YHOO! message board fucked this part up, or the author is completely clueless.  See, that statement is EXACTLY WHY MS WILL KEEP GROWING, because doctors and patients keep failing with the other cheaper drugs.  QCOR can charge such a high price for this drug because it is a DRUG OF LAST RESORT meaning it is used after nothing else fucking works so the demand curve is more inelastic than Joan River’s sphincter.  And ummm, hey dickbag, you realize MS has been growing ~100% a fucking year and is now half of their fucking business and the price hasn’t come down, right?  Now look, Money McBags has pointed out that despite 123% y/y growth in Q3, MS was only up 6% sequentially and in the pre-announcement for this Q, MS was up only 55% or 9% sequentially, but they just doubled the salesforce and only ~9% of MS doctors have been penetrated, so Money McBags expects sales to pick up again in 2011.  And this of course doesn’t even consider the fact that they may have found a market bigger than MS for Acthar with NS.

3.  As for trying to smear QCOR’s management team because of past large shareholders who by the way, DID NOTHING FRAUDULENT WITH QCOR, that is not just intellectually bankrupt but morally bankrupt.  First of all, Money McBags doesn’t believe those investors, Sigma Tau, own shares anymore.  They don’t show up on lists of largest holders and if they own anything, it’s a Vern Troyer nuthair’s worth.  Secondly, as Money McBags said, this is a fucking good CEO.  The guy took over a business that was about to fail and has built it in to a $1B company by simply raising the fucking price and being smart enough to realize there was still demand in some segments.  These guys are shareholder friendly and good fucking operators.  The last two paragraphs of the Barron’s article were so non-sensical that Money McBags is embarrassed to refer to himself as a financial writer (which is of course why he refers to himself as a dick joke writer).

Usually Money McBags hates when companies respond to shit like this but the column was so egregiously misleading, that he applauds this 8k release by QCOR in reference to this hatchet job where they basically tell the Barron’s writer and this short analyst to eat a fat dick (and the analyst by the way needs to sell more work and thus needs the stock to go down so thus needs to spew shit out in public that will cause investors not paying attention to worry).  Honestly, Money McBags can’t remember ever seeing such shoddy, one way, slanted reporting in any name he has ever covered.

If you read Money McBags’ last detailed analysis of QCOR, he has them earning ~$.91 per share next year (though he ammended that to ~$.89 per share after their pre-announcement) and after their pre-announcement, he recommended taking some profits off the table as the company was trading ~17x that.  Even with today’s sell off, the company isn’t cheap but it is not going down to $6.50 per share as the analyst in the Barron’s article suggests because they are still fucking growing.

Anyway, Money McBags gets to his numbers by assuming MS will grow 30% next year (~7% sequentially per Q which is where it is now and with a doubling of the sales force, one would expect that to be conservative) and IS/NS will grow 20% as they are now on fucking label for IS.  He also said “Q4 is going to suck so take your profits and buy back if you want when the stock sells off since it has had a monster run and is due for a bit of disappointment.“  So given that, and this shitstain of an article by Barron’s, the stock could get really cheap again after Q4 when people sell on the disappointing Q and thus it could provide a nice entry point (though not as nice as this entry point).  Money McBags isn’t a buyer here (which has nothing to do with the Barron’s article, and everything to due with the multiple), so he’d be happy if it sold off and he could buy some cheaper, that said, he can’t just sit here and read blatant misinformation.

As Money McBags warned last Q: “Just be very careful with medicare reimbursements and headline risk as this is one of the 5 most expensive drugs on the market so there is always a chance for some bureaucrat to get their panties in a bunch about the pricing (though if it is republican congresswoman Mary Bono Black whose panties get bunched, that will certainly dull the pain).”  So now you know what he meant.

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