JNJ

Gilead Sciences Continues Its Meltdown

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Valuentum has been out of Gilead in the newsletter portfolios for some time. As the Best Ideas Newsletter portfolio continues to make new highs, Gilead continues to set new 52-week lows. This is the power of “portfolio thinking,” something we’ve been preaching for a long time. By Alexander J. Poulos Gilead Sciences (GILD) burst into the mainstream in 2015 due to its aggressively priced treatment for hepatitis C (HCV). The company gained notoriety as it priced the treatment at $1,000 per tablet, garnering scorn from politicians on both sides of the political aisle. The original treatment (Sovaldi) was improved on with Harvoni, as Gilead ushered in a new age of cures for a dreaded infectious disease. The difficulty in modeling … Read more

Is AbbVie a Value Trap?

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With uncertainty surrounding the patent of blockbuster drug Humira, AbbVie is looking to deliver another success story from its pipeline. Is it headed for a patent cliff? Let’s take a look. By Alexander J. Poulos and Kris Rosemann A successful operator in the pharmaceutical industry (XLV) is often characterized by having high margins, allowing for copious amounts of free cash flow generation, which can be returned to shareholders via dividends. In today’s yield-starved market environment, major pharma, and the above-average yields of some players within, remains in demand, but investors must be cognizant of the unique risks that face the industry. One key risk remains the loss of patent protection on drugs and treatments that leads to the aforementioned attractive … Read more

#14? You Can’t Control The Market

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Image shown: Wall Street Journal front pages from the Financial Crisis — a reminder that an investor cannot control the markets.

Should this be added to the “13 Steps…” piece?

J&J Boasts Below-Market Earnings Multiple; Deal with Actelion Not Concerning

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Image Shown: J&J’s robust pharma pipeline; source: J&J There’s a lot to like about J&J’s investment opportunity, not the least of which is its strong pharmaceutical pipeline. Deal-making could challenge its pristine balance sheet, but we don’t expect much to derail our thesis. By Brian Nelson, CFA J&J (JNJ) reported solid fourth-quarter 2016 results Tuesday, January 24. Uncertainty regarding the healthcare landscape in the midst of a Trump Presidency is the main dynamic weighing on shares, but operational sales growth of 2.3% and adjusted fourth-quarter earnings per share expansion of 9.7% weren’t bad by any stretch. They were actually quite good. We wonder if many portfolio managers are rotating out of some of the strong healthcare entities on the basis … Read more

The Coming “Goldman Sachs Era”

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Valuentum covers recent developments in the financials sector, including hopes for a relaxation of certain prohibitive Dodd-Frank rules that, if repealed, could pave the way for improved economic returns across the banking sector during the Trump administration. A look back at the month of September 2008, and how Goldman Sachs may very well shape the financial markets during the next few years are two other areas in the piece. Financials stocks have come roaring back since Trump was elected the 45th President of the United States. We’ve participated. By Brian Nelson, CFA It’s been more than 8 years now. The month of September 2008 shaped my view of the financials and banking sector more than any other month possibly could–The … Read more

Looking Closely at Zimmer Biomet

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Medical technology companies have taken their share of lumps as of late, but the long-term may be too bright for investors to ignore Zimmer Biomet’s shares. By Alexander J. Poulos and Brian Nelson, CFA The medtech field offers an intriguing combination of high-margin growth coupled with defensive characteristics as the end product is considered recession resistant. To add context, an individual who requires a knee transplant may wait a bit before having the surgery, but as the joint disintegrates the need will hasten irrespective of economic conditions. The ebbs and flows of the economic cycle have little to do with such a decision, in most cases. That said, the field remains fiercely competitive with many upstarts that have innovative technologies, … Read more

5 Shocking Stock Market Predictions for 2017

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Image Source: Claudia Dea  Valuentum: 2017 Is the Year of Evangeline Adams By Brian Nelson, CFA “Entrepreneurs are never satisfied. They want to do things better. They strive for perfection and use all the ingenuity to their command to achieve it.” – J.W. Marriott My Inbox Was Overflowing with Kindness Your positive replies to my last email, “Words Cannot Express How I Feel” were simply incredible. My inbox was flooded with so many emails, so many kind words. There were so many that I’m still working through them. If you haven’t received a personal reply, plan on getting one. You’re very important to me. It’s quite possible that I may very well be the luckiest man to have such wonderful … Read more

Image: Returns Following the Trump Victory

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To download the table for easier viewing, please select the link . Financials: Trump’s Treasury Secretary choice Steven Mnuchin wants to repeal most of the burdensome Dodd-Frank legislation. A steepening yield curve is helping banks and may drive improved net interest margins in coming periods. Goldman Sachs is ripping higher, leading the Dow’s charge.   Crude Oil: The world is moving to a better balance in supply/demand dynamics in the energy markets. OPEC is talking, has agreed to cuts, and expectations for improved economic growth are helping energy resource pricing. High-beta companies such as Continental Resources are rallying hard.   Energy: Capital spending cuts are bolstering free cash flow in the upstream space as energy resource pricing improves. Reduced regulations could help … Read more

Tough Month – My Goodness

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By Brian Nelson, CFA The market rallied hard this month and seemed to leave a lot of the Dividend Growth Newsletter portfolio ideas behind. I’m not going to sugarcoat the results: The Dividend Growth Newsletter portfolio disappointed this month, and for that I’m sorry.  A lot of it may be “explainable” in light of what happened on Election Day 2016, however. I think a lot of investors have shifted capital from the stronger dividend payers to the more-speculative ones in hopes that a new, pro-business Trump administration will be their saving grace. We hope so, but Trump cannot be President forever, and dividend growth investors should consider a long-term perspective, in my opinion, especially when it comes to compounding payouts … Read more

Pharma, Biotech and How to Consider Investing In It

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The Valuentum analyst team digs deep into recent trends in big pharma and biotech from the lofty pricing of drugs to political and competitive pressures to ETF considerations and beyond. ~10 mins. If you cannot view the podcast below, please view the transcript below or select the link here. Tickerized for holdings in the XLV and IBB. Brian Nelson, CFA Gilead’s (GILD) hepatitis C regimen, almost a hundred thousand dollars. Vertex’s (VRTX) cystic fibrosis drug — hundreds of thousands of dollars per year. Have the drug companies lost their mind? This is Brian Nelson from Valuentum Securities, and today joining me is Mr. Kris Rosemann and Mr. Chris Araos — and we are going to talk everything healthcare, biotech… Mr. … Read more