MRK

Pfizer: Lots of Moving Parts in a Generally-Inspiring Second Quarter

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Image Source: Pfizer We came away generally impressed with the progress at Pfizer during the second quarter as the company begins to replace its current patent protected line-up with next-generation treatments. Pfizer continues to gain political favor with its decision to forgo price hikes on its product line-up while announcing a re-organization of the business structure. By Alexander J. Poulos Key Takeaways There has been lots of political intrigue as Pfizer seeks to gain favor with the White House via rolling back its annual drug price hikes. The company announced plans to split into three companies, which we view as the first step towards a complete split of the company. In the second-quarter earnings report, released July 31, Pfizer raised … Read more

On Diversification

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Diversification is one of the most important components of equity investing. By Brian Nelson, CFA I wanted to touch base briefly today to see how everyone is doing, and how we can continue to make our website better. We’ve been getting a lot of great feedback on the ability to download our data in Excel and create your customized screens. Instead of having to click on a number of the web pages on the website to access the screens, all you have to do is download the Excel file, and use the standard sorting functionality in it. Let us know if you think we need to host a walk through of how to use the Excel screener. We think it … Read more

Valuentum’s Weighted Average Cost of Capital (WACC) Distribution

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The weighted average cost of capital is one of the most subjective measures in corporate finance, but it is also one of the most important ones. “The most important item over time in valuation is obviously interest rates…If interest rates are destined to be at low levels…It makes any stream of earnings from investments worth more money. The bogey is always what government bonds yield….Any investment is worth all the cash you’re going to get out between now and judgment day discounted back. The discounting back is affected by whether you choose interests rates like those of Japan or interest rates like those we had in 1982…When we had 15 percent short-term rates in 1982, it was silly to pay … Read more

Roche Continues to Underwhelm

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We like cutting-edge, novel therapies as they have a transformative impact on a small to mid-cap biotech as years of revenue growth could be in the cards. While new therapies are the life-blood of the research field, the impact of a new novel therapy on the growth prospects of a large cap is often muted, however. Such is the fate of Roche as it struggles to replace its mainstay oncology division with new patent-protected entities. By Alexander J. Poulos Key Takeaways Roche remains highly exposed to loss of patent exclusivity as a whole suite of its top-producing products is expected to lose coverage over the next couple of years. Roche will need to hit a few home runs, but its … Read more

Merck’s Dominance in Immuno-Oncology Expands Once Again

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Image Source: Merck Merck simply blew away the competition–the results are simply incredible. Keytruda is a gamechanger, and we think it will become the top-selling pharmaceutical once the patent lapses on Humira. By Alexander J. Poulos Key Takeaways Merck has solidified its lead in non-small cell lung cancer, which should power revenue growth well into the future. Merck will become increasingly more dependent on Keytruda for top-line growth, however, as we think its clinical pipeline remains uninspiring. The company’s dividend is a head-turner, but there are long-term risks to big pharma payouts. Shares look fairly valued to us. What is Immuno-Oncology? Immuno-oncology is the innovative field which seeks to augment the body’s own immune system to fight and hopefully eradicate cancer. … Read more

Study: Valuentum’s Best Ideas Newsletter Portfolio

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To read the study, please click on the image to download the pdf document (pdf).

The Most Important Topic in Stock Investing

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President of Equity Research, Brian Nelson, discusses why price vs. value is the paramount consideration in stock investing. Brian Nelson, CFA: This is Brian Nelson from Valuentum Securities. Today, I wanted to talk about a number of investment concepts that I think are absolutely paramount for every investor to know.  The very first concept is price versus value, and this one is paramount to any investment process. Now I’m not just giving this lip service–this is just one of the core concepts of investing, equity investing. The reality of stock investing is that each company has a present value of future free cash flows that it generates, and those future free cash flows roll up to a fair value, the … Read more

Growth Continues at Bristol-Myers; Eliquis Fantastic

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Image Source: Bristol-Myers Bristol-Myers Squibb continues to put up nice revenue growth as demand for Eliquis is coming in better than expectations. The company’s hopes to win first-line therapy in combination therapy for non-small cell lung cancer have been dealt a severe blow, however. We haven’t liked Bristol-Myers’ share-price performance of late and remain on the sidelines. However, we are watching its equity closely for addition to the simulated newsletter portfolios. By Alexander J. Poulos Key Takeaways We remain astounded by the stellar growth of Eliquis as the product remains a runaway blockbuster for Bristol-Myers. The growth of Eliquis has surpassed our most optimistic expectations as it is now the market leader. We believe the growth in Opdivo is far … Read more

Incyte’s Ongoing Disappointments and Ultragenyx’s Exciting Development

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The pharma/biotech sector, unlike other mainline industries, is driven by the clinical data readouts on the next-gen molecules in the clinical pipeline. We have witnessed many exaggerated moves with an often-binary outcome on the smaller single molecule entities, but we also have witnessed a negligible impact on the broader, more-diverse industry behemoths. We wanted to touch on a few recent data readouts to illustrate the volatile, risky yet potentially lucrative nature of the industry. By Alexander J. Poulos Key Takeaways The iShares Nasdaq Biotech ETF serves as an excellent proxy for investors to gain broad exposure to a number of biotech equities, but it is not for the faint of heart. Incyte has disappointed on a number of occasions. From … Read more

ICYMI: Valuentum’s Improved Stock and ETF Web Pages

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Valuentum has rolled out improved stock and ETF web pages on its website valuentum.com/. Now, subscribers can access key proprietary information on the stock and ETF web pages in addition to the customary stock and ETF reports. Dear reader, We have some exciting news that we can’t wait to share with you! At valuentum.com/, we have rolled out new stock and ETF pages that conveniently include a variety of our proprietary metrics from the Dividend Cushion ratio to the Economic Castle rating and beyond! There’s even mouseover functionality so you can learn about how we define the key metrics across our stock-selection and dividend growth methodologies. You’ll still have access to the stock and dividend reports on the landing pages, … Read more