TEVA

Generic Drug Price Deflation Continues to Weigh on Shares of Teva

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Shares of former Best Ideas Newsletter portfolio idea Teva Pharmaceuticals have come under renewed selling pressure after reporting weak quarterly results due largely to deflationary price pressures felt in the generic drug division. Teva has been relatively powerless in stopping the trend. We had removed the shares from the Best Ideas Newsletter portfolio well before the last leg down, and the Dividend Cushion ratio warned of tremendous risk to the sustainability of the dividend far in advance. By Alexander J. Poulos and Kris Rosemann Generic Drug Deflation Teva Pharmaceuticals (TEVA) maintains its position as one of the world’s largest manufacturer of generic medications, but the marketplace for a generic drug differs from the market dynamics of the branded space. We view … Read more

I CARE

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Image Shown: The S&P 500 from early 2009 through today, June 15, 2017. By Brian Nelson, CFA There it is — the upward-sloping chart of the S&P 500 (SPY) since the March 2009 panic bottom. What a sight to see… The past 8 years have marked an incredible bull market in US equities and one for the record books in many instances. The drivers behind the multi-year rally have been many — ultra-low interest rates and their magnifying impact on equity valuations, strong earnings growth from the doldrums of the Financial Crisis, and the proliferation of passive and dividend-growth strategies de-emphasizing the price-versus-value equation. “Money,” it seems, is chasing stocks at any price, and most of the trading on exchanges … Read more

Alerts – Spring Cleaning in the Newsletter Portfolios

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We’re making a number of changes to the newsletter portfolios. By Brian Nelson, CFA Changes in Dividend Growth Newsletter portfolio We’re removing Medtronic. Medtronic (MDT) reported decent fiscal fourth-quarter results May 25 that showed revenue advancing ~5% and bottom-line earnings-per-share beating consensus by a couple pennies. We’re not messing around in this frothy market though, and we’ve learned from our miscue with Teva Pharma (TEVA). Medtronic has too much debt this late into the credit cycle for our comfort, and frankly, we’re starting to question more and more why it might have changed how it measures free cash flow. We’re letting shares go from the Dividend Growth Newsletter portfolio. The company was added to the Dividend Growth Newsletter portfolio under … 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

Novartis’ Continuous Dividend Growth and Promising Pipeline

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Image Shown: Novartis’ dividend history, source: Novartis. By Alexander J. Poulos and Brian Nelson, CFA Sometimes the most attractive opportunities manifest themselves in companies that are in the midst of a transition. In the case of entities in the pharmaceutical industry, the transition often occurs during the period of patent-protection loss of a top-selling treatment. Typically, the market will sour on the company’s prospects as revenue is expected to decline in the near term. However, the longer investment time horizon we have at Valuentum allows us to examine whether such opportunities still fit for inclusion in the newsletter portfolios. Said differently, we’re less interested in what the company will do in the next quarter or two than we are in … Read more

Teva’s Near-17% Free Cash Flow Yield; Is The Bottom Finally In?

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What a roller coaster ride in Teva’s shares. After converging to intrinsic value, Teva’s shares have fallen from grace. Unfortunately, our excitement over this big winner has turned to agony. But is the bottom finally in? What has happened in the past is now behind us, and we have to continue to look forward with respect to our analysis of shares. By Alexander J. Poulos and Brian Nelson, CFA Best Ideas Newsletter portfolio holding Teva Pharmaceuticals (TEVA) continues to suffer along with the entire healthcare complex as we usher in the New Year. Once a big winner in the Best Ideas Newsletter portfolio even just a few months ago, shares have now fallen from grace. We’re not happy about this … 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

Teva’s ~7x P/E Multiple – Earnings Insight

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Image Source: Teva Let’s cover some ground on Teva Pharma’s (TEVA) third-quarter report. By Brian Nelson, CFA What management said: “This has been a year of transition for Teva, underscored this quarter by the close of our strategic acquisition of Actavis Generics, which had significant contribution to our results. Actavis will continue to contribute in a meaningful way to the future growth of our generics business through the strengthened R&D capabilities and complementary pipeline and portfolio, and enhance our leadership in an increasingly evolving industry,” stated Erez Vigodman, Teva’s President and CEO. “We were also pleased to report this quarter that we have successfully completed the second pivotal phase three study for SD-809 for tardive dyskinesia and plan to submit … Read more

Can Marijuana Stocks Burn Your Portfolio?

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The Valuentum analyst team walks through changes in the marijuana regulatory landscape, the plethora of risks speculators face while dabbling in marijuana stocks, and the hopes that some might be long-term winners. ~8 mins. If you cannot view the podcast below, please view the transcript that follows or select the link here. Tickerized for stocks associated with the marijuana industry. Brian Nelson, CFA: Can marijuana stocks burn your portfolio? This is Brian Nelson for Valuentum Securities and joining me for today is Mr. Kris Rosemann and Mr. Chris Araos, and we are going to talk all about marijuana stocks. Mr. Kris Roseman would you like to take us through some of the dynamics that you are seeing across the industry? … Read more