NVS

Big Movers for the Week Ending September 28

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Those topping the big-movers board for the week ended September 28 include Gilead, Apple, Altria, Hasbro, Novartis, and more. By Christopher Araos This is a new weekly series launched to help readers stay up to date with big movers within the simulated Best Ideas Newsletter portfolio and simulated Dividend Growth Newsletter portfolio. Best Ideas Newsletter Winners Biotech powerhouse Gilead Sciences (GILD) advanced 2.3% during the week ending September 28 as the company announced a launch of generic versions for Epclusa and its blockbuster Harvoni. Another key mover of 2.2% on the week was Apple (AAPL), which persuaded a federal appeals court to throw out $234 million in damages for infringement of University of Wisconsin’s computer processing technology. Altria Group (MO) … 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

Novartis: Business Transformation in Progress

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Image shown: The performance of Novartis’ stock price since the beginning of 2017. We’re still fans of Novartis as we feel the steps taken by the new CEO to radically reshape the healthcare conglomerate will unlock significant shareholder value. The company remains one of our favorite dividend growth ideas within the healthcare space. By Alexander J. Poulos Key Takeaways The transformation of Novartis continues as the company looks to shed its conglomerate image. The Alcon division will be split-off in what we believe should unlock significant shareholder value. The core new drug discovery business continues to perform well as new products, most notably Cosentyx, continues to show strength. We agree with the decision to retain the Sandoz generic drug division … Read more

What Are the Downside Risks of Gilead Sciences?

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We think the risk-reward at Gilead remains positively skewed in investors’ favor, but let’s examine the downside case for Gilead Sciences so there are no surprises. It’s always a good approach to evaluate where an investor may go wrong with an investment idea, and assessing upside and downside cases, as in a fair value range, remains par for the course. By Alexander J. Poulos Key Takeaways We wanted to highlight a few key points on what could go wrong on our bullish thesis on Gilead Sciences. We believe the HCV market is stabilizing with Gilead on track to meet its dramatically-reduced revenue forecast. Biktarvy–Gilead’s next-gen HIV product–is poised to steal significant market share. Yescarta, the recently-acquired CAR-T treatment, should generate … Read more

Biogen Hits a Potential Home Run

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We closely follow the progress of the clinical pipeline of companies in the pharma/biotech sector. Unlike other less product-driven industries, the pharma/biotech sector can experience wide swings in operating performance as a result of the lapsing of patent protection on key drugs, underscoring the importance of innovation to replace aging products. Biogen may have hit a home run in the critical field of Alzheimer’s, an area of tremendous untapped need. By Alexander J. Poulos Key Takeaways Biogen’s current product lineup is beginning to show its age, and a fresh injection of novel products may be necessary to jumpstart top-line revenue growth. Spinraza is a notable step in the right direction, but we fear new gene-editing therapies may disrupt Spinraza, thus … 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

The Promise of CAR-T Therapy

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Image Source: Gilead The medical field, particularly the biotech industry, is quite innovative, and advances in medicine can help a specific target population with the ultimate gift–the gift of a better life. We’re excited by the stunning advances in the CAR-T field for the treatment for various forms of cancer that have, in the past, come with an often-bleak prognosis. We expect a shift in the advances in immune-oncology as the CAR-T revolution is in its early stages. Key Takeaways CAR-T therapy holds the potential to revolutionize how hematological cancer is treated. The biotech industry remains in the early stages of the revolution, but thus far the results have been promising. We believe Gilead Sciences is best poised to exploit … 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 Transformation of Novartis Continues

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Image Source: Taki Steve Leadership change can often bring a great deal of uncertainty especially when a new leader is replacing a successful CEO. In the case of Novartis, we are witnessing a focused effort to streamline the business: a deliberate attempt to shift focus from a sprawling healthcare enterprise towards a more pure-play pharma/biotech powerhouse with an innovative, cutting-edge product portfolio. By Alexander J. Poulos Key Takeaways We liked that Novartis divested its stake in its healthcare joint-venture with GlaxoSmithKline, and we were very pleased with the large sale price of $13 billion. The cash proceeds will offer increased financial flexibility at Novartis. We’re not completely against the company’s near-$9 billion deal for AveXis, though this, too, had a … 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