GSK

Resetting Your Mental Model

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Image Source: affen ajlfe A version of this article was originally published on our website October 6, 2013. Having the right mental model and using the right information can be the reason why you win or lose in investing. “What is the definition of timeliness? Many believe it is getting information to investors as quickly as possible after an event, or updating something every single day or week for immaterial information. I believe in a different definition of timeliness. I believe timeliness is using all information available in a mosaic approach to accurately predict the event before it even happens. Take Kinder Morgan as the latest example. We were the only ones predicting what was going to happen before it did. To investors, … Read more

Health Care Sector Remains Hot

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Image Shown: The Health Care Select Sector SPDR ETF, a holding in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios, has been on an upward tear over the past several years. Strong macro tailwinds combined with the ability for industries within the health care sector to generate meaningful shareholder value have been key to supporting strong capital appreciation of equities operating in the area of late. By Callum Turcan The Health Care Select Sector SPDR ETF (XLV) is a top holding in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios. We like the exposure and diversification to health care equities that XLV provides. XLV yields ~1.5% as of this writing. State Street Corp (STT) acts as … Read more

More Big Pharma Earnings to Digest

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Image Source: Zoetis Inc – 2019 Annual Shareholders Meeting Presentation Calendar third-quarter 2019 earnings was a busy time for biotech and pharma companies. We covered a number of biotech and pharma earnings in this piece here, but let’s dig into a few others. In alphabetical order by ticker: GSK, PFE, ZTS. By Callum Turcan In alphabetical order by ticker: GSK, PFE, ZTS GlaxoSmithKline plc (GSK)–4.6% yield–reported third quarter results for 2019 on October 30. Its pro forma adjusted sales rose by 6% year-over-year, and please note the British pharmaceutical and consumer health giant has been very busy over the past couple of years. Before we get into that, note GlaxoSmithKline reported strong performance across the board at its three main … Read more

Our Reports on Stocks in the Pharmaceuticals – Big Industry

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Image Source: A 4 Structure of the Pharmaceuticals – Big Industry The big pharma industry is primarily composed of makers of branded drugs. Intellectual property protection is vital to the successful commercialization of medicines and offers makers of branded drugs a unique competitive advantage via patents, which can extend for decades. When branded drugs lose market exclusivity, however, makers of generic pharmaceuticals can generate intense price competition, causing drastic revenue losses on unprotected therapies. Long-term success for branded pharma companies depends on a strong and diverse drug pipeline, which can be augmented by M&A activity. We generally like the group and expect continued industry consolidation. We’ve optimized our health care coverage, the reports of which can be found here.

Biotech and Pharma Roundup

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Image Source: e-Magine Art Some big news in the world of biotech and pharmaceuticals has come out this week, starting Monday October 21, that we want to get out in front of our members. In alphabetical order by ticker symbol: BIIB, BMY, MRK, NVS. By Callum Turcan Biogen Inc (BIIB) reported third quarter 2019 earnings on Tuesday October 22 that easily beat both top and bottom line estimates. That was partially due to strong sales at its SPINRAZA offering, which is used to treat spinal muscular atrophy. Shares of BIIB rocketed higher during the trading session as investors priced in the upside that Biogen’s Aducanumab treatment could generate, with the company announcing that it was going to ask the US … Read more

Merck Shows Impressive Margin Expansion

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Image Source: Merck & Co Inc – IR Presentation By Callum Turcan Pharmaceutical giant Merck (MRK) has performed well during the past few fiscal years by reducing operating costs while utilizing strong growth at some of its oncology drug offerings to drive sales higher. Shares of Merck yield 2.7% as of this writing and are trading at the upper half of our fair value estimate range after an impressive run up in Merck’s stock price began in April 2018. Management recently raised Merck’s full-year sales and non-GAAP EPS guidance for 2019, which we will cover in a moment. Enhancing Profitability Levels From 2016 to 2018, Merck cut its GAAP operating expenses from $35.1 billion to $33.6 billion (down over 4%) … Read more

Elanco Buys Bayer’s Animal Health Unit, Gaining Scale and Greater Exposure to the Humanization of Pets” Trend”

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Image Shown: Shares of Elanco Animal Health Inc (ELAN) sold off after the company announced on August 20 it was acquiring Bayer AG’s (BAYRY) animal health unit through a cash and deal stock deal worth $7.6 billion at the time the deal was announced. By Callum Turcan On August 20, Elanco Animal Health Inc (ELAN) agreed to acquire Bayer AG’s (BAYRY) animal health unit for $7.6 billion (at the time the deal was announced) through a cash and stock deal. That includes $5.3 billion in cash and $2.3 billion in stock, keeping in mind shares of ELAN initially shifted lower after the news. Bayer plans to exit its stake in Elanco over time as management seeks to rebuild the company’s … Read more

From Nano Cap to Big Cap in Biotech

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We cover some very interesting technologies in this piece, from a nano-cap company with a call option on survival, a stroke therapy firm that may improve the lives of millions, to a big-cap genomic sequencing leader that has exposure to the development of a liquid biopsy test for cancer. By Brian Nelson, CFA NeuroMetrix May Not Survive NeuroMetrix (NURO) is a nano-cap entity, a rarity when it comes to our commenting on ideas, and it comes with some unusual risks even beyond those inherent to the healthcare/biotech space. The company has incurred accumulated losses of $191 million since inception, and while it held $6.8 million in cash at the end of 2018, it may need to raise additional capital to support … Read more

Novartis Closes Out Busy Year; Proposes Dividend Hike

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Image Source: Novartis fourth quarter presentation European pharmaceutical giant Novartis had a busy year in 2018 on its quest to renew its focus on medicines, and management is excited about its future growth trajectory. We continue to like its free cash flow generation and dividend growth potential. By Kris Rosemann 2018 was a busy year for simulated Dividend Growth Newsletter idea Novartis (NVS), which reported fourth quarter results January 30. The company completed a strategic review resulting in the planned first half 2019 spin-off of its Alcon division, it agreed to sell its Sandoz US oral solids and dermatology portfolio, it sold its stake in the GlaxoSmithKline (GSK) consumer healthcare joint venture for $13 billion, and it invested in long-term … Read more

Brace for More Volatility

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Image shown: The S&P 500 ETF (SPY) since August of last year. The markets have broken through key support levels, and now support has become resistance. Volatility remains heightened since the low-vol ETN blew up in February. This article is the introduction to both the Dividend Growth Newsletter and High Yield Dividend Newsletter, both of which will be released today due to the holiday January 1. By Brian Nelson, CFA Markets are facing big pressure on the trading session January 3. There’s more to the story than rising interest rates. There’s more to the story than the US-China trade war. There’s more to the story than concerns about the political environment. Price-agnostic (indexing and quant) trading, as I outline in … Read more