JNJ

Novartis’ Clinical Pipeline Continues to Innovate

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We continue to be impressed with the depth of Novartis’ clinical pipeline, which should aid in the company’s acceleration from the revenue cliff experienced as a result of the patent loss of top-selling product Gleevec. We are adding Novartis to the portfolio of the Dividend Growth Newsletter. By Alexander J. Poulos Overview Novartis’ (NVS) primary strength, in our view, remains the company’s diverse revenue stream. Thus far, for example, Novartis has capably handled the revenue cliff from the loss of patent protection of its top-selling product Gleevec admirably, with only a 1% drop in sales during the first half of 2016. Though such a dynamic can change in coming periods, we have found the relative predictability of Novartis’ revenue stream … Read more

Stocks in the News: Harley-Davidson, Johnson & Johnson, Netflix

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Earnings season is picking up. Let’s evaluate a few quarterly reports from some bellwethers. By Brian Nelson, CFA Harley-Davidson (HOG) Not Revving Like It Used To We plan to update our report and fair value estimate of Harley-Davidson following its weak second-quarter report, released July 18. Both revenue and net income faced pressure on a year-over-year basis in the period, with earnings per share falling 4.5%. Management spoke of “challenging market conditions,” and the executive team is right about that: Harley-Davidson worldwide retail motorcycle sales fell 6.7% in the quarter, while Harley-Davidson retail motorcycle sales in the US were down more than 9%. The company’s US market share is holding up (~48.5%), but we are starting to worry about more … Read more

An Overview on Roche Holdings

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Source: Roche The healthcare industry remains a global enterprise with world-class companies working towards new treatments. Let’s have a look at the prospects of Roche Holdings. By Alexander J. Poulos Overview Roche Holdings (RHHBY) is far from a household name in the US, yet it remains one of the top pharmaceutical companies in Europe. When reviewing the prospects of Roche, we could not help but draw the comparison to the old Abbott Labs (ABT) before splitting off Abbvie (ABBV). The holding company houses a world-class diagnostics division with one of its main consumer products being the Accu-Chek Blood Glucose Test Strips. The diagnostic group can be viewed from the perspective of a slow and steady earnings producer with incremental innovation … Read more

Best Ideas, Dividend Growth Newsletter Alerts and More

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Image Shown: The stock price performance of Boeing. Let’s take a look at recent news from newsletter portfolio holdings. We’re also parting with a “trade” we never should have made in the first place, and we’re letting go of one of our favorite restaurants in light of deteriorating technicals. This and more… By Brian Nelson, CFA Aside from predicting the ongoing inflation of the current equity market bubble in the US so far in 2017, we also thought crude oil prices (USO) would continue their recovery. Unfortunately, this hasn’t exactly worked out, and US crude oil prices have now entered a “bear market,” now falling below $43 per barrel. Are we saying that we know where crude oil prices are … Read more

Pipeline Woes Continue to Plague Amgen

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Image Source: kibbles_bits By Alexander J. Poulos Earnings Release We have written a few bearish pieces on biotech stalwart Amgen (AMGN) this year. In the first piece, “The Dreaded Patent Cliff: 3 Pharmaceutical Companies at Risk,” we presented a number of areas of concern, most notably the expected drop in revenue from Amgen’s two main products. In its first-quarter earnings release, issued April 26, Amgen posted earnings per share of $3.15 on a non-GAAP basis versus $2.90 for the same period last year. Upon first glance, the numbers would indicate solid growth, but upon further examination, a worrisome trend emerges. The “earnings beat” is a direct result of a decrease in expenses and a lower share count, as top line … Read more

Valuentum’s 3 Breakthroughs in the Field of Finance and More

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Valuentum’s President Brian Nelson pauses for a picture before speaking at the CFA Society of Houston in March 2017. By Valuentum Editorial Staff Let’s cover Valuentum’s 3 major breakthroughs in the field of finance. The first one is big and may challenge you to rethink everything you think you know about investing. 1. On a logical framework, Valuentum has debunked John C. Bogle’s landmark syllogism that has paved the way for the concept of index investing. Index investing has been built on a logical shortcoming, whether supported by evidence or not. We think it is important that the investment community know of this. Read (pdf): The “Luck” and “Randomness” of Index Funds (2018), Brian Nelson, CFA See video documentation: /FALLACY_of_Index_Funds To … Read more

Can Vertex Pharmaceuticals Dominate the Race to Treat Cystic Fibrosis?

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Tickerized for holdings in the XLV and IBB. Cystic Fibrosis is a rare disease that afflicts an estimated seventy-five thousand patients worldwide. Vertex Pharmaceuticals is the first to market with a combination treatment to treat a portion of the overall patient population. Will Vertex win the race to bring forth a triple therapy to treat the vast majority of those afflicted? By Alexander J. Poulos Cystic fibrosis (CF) is a recessive genetic disorder. The patient that is afflicted will carry two copies of the cystic fibrosis conductance regulator protein (CFTR) gene. The CFTR gene allows the body to produce the CFTR protein, whose function is to remove chloride from the cells. Patients that have CF will suffer from a “thickening” … Read more

First Quarter 2017 Comes To A Close

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“Be sure to continue to study the difference between price and value—just because a stock’s price has advanced doesn’t make it more expensive if the value of its enterprise has increased at a faster rate. If you understand this concept, you may be smarter than 99.9% of the investing population.” – Brian Nelson, CFA By Brian Nelson, CFA The first quarter of 2017 came and went. Including dividends, the S&P 500 (SPY) roared nearly 6% higher during the period thanks to solid gains from the land of technology, an area that we have liked for the longest time. The Technology Select Sector SPDR (XLK) advanced more than 10% during the period, and key technology holdings in the Dividend Growth Newsletter … Read more

Dow 21,000+; Forward P/E on S&P 500 ~18!!!

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By Brian Nelson, CFA To say that the broader equity market is “extended” is an understatement. After testing the 20,000 mark on the Dow Jones Industrial Average (DIA), stocks have now plowed through 21,000 in such a fashion that can only be compared to the euphoric trading activity of 1999 when the index surged to 11,000 from 10,000 over roughly the same time frame. Who remembers the days of the dot-com bubble? The market is clearly off its rocker, but the market isn’t always on its rocker. Stock prices under and overshoot intrinsic value all of the time. It’s a part of the markets, as much as oxygen is necessary for human life. The markets overshot to the downside during … Read more

Johnson & Johnson’s Oncology Division A Force to Be Reckoned With

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Healthcare and consumer staples giant Johnson & Johnson is a core holding in both newsletter portfolios. Let’s take a deep dive into one of its key sources of growth, its ‘Pharmaceutical’ segment. By Alexander J. Poulos and Kris Rosemann Consistency of returns is one of the hardest goals to achieve in the investment world. Often, one of the key components when selecting equities to build a long-term portfolio is their respective durability through the ups and downs of the economic cycle (in portfolio theory their collective performance would matter). A company that is able to generate resilient returns under various conditions often has a business model with defensive characteristics and an attractive Economic Castle. Johnson & Johnson (JNJ), the consumer … Read more