From Nouriel Roubini's non-subscription Email, just in case you're wondering what he's emphasizing:
H2 2009 Pick-Up in GDP Growth a Temporary Phenomenon
Auto Sector Impact Overstated
A Smaller-than-Expected Boost from Inventories
Residential Investment to Disappoint
W-Shaped Impact of Fiscal Stimulus
No Signs of Consumption Revival
Weak Outlook for Private Investment
Consumer Retreat Will Be Structural
Higher Structural Unemployment
Less Credit in the Economy
Corporate Restructuring Will Hit Productive Investment
Public Sector Will Be a Drag on Growth
Rebalancing Growth
He forgot to put on his happy face yet another day!
And over at Breakfast with Dave today, Dr. Rosenberg continues to emphasize the deflationary current trends, though he's both short-term optimistic on Treasuries--thinking that a break below 3.40% on the 10-year could quickly bring on a move to 3%-- and bullish long-term on gold.
So the bears continue to stick to their guns as most of the world emphasizes growth.
Roubini has not really been proven incorrect yet in his economic forecast, though he erred in forecasting the current stock move as just another brief fake-out.
Meanwhile, amongst the defensive stocks, the yield-minded and the technically-minded may want to look at Bristol-Myers Squibb, BMY. Unlike most of the other big guys in its field, it bottomed in the fall, not March, and a quick look at the chart suggests upside to 24 (where I would take profits). Note this stock usually moves very sluggishly, and definitely has downside risk in a general sell-off. Not to mention political considerations as always.
Interesting times, with a sense that more pros are exiting this stock market.
Copyright (C) Long Lake LLC 2009
Showing posts with label Bristol-Myers. Show all posts
Showing posts with label Bristol-Myers. Show all posts
Wednesday, August 19, 2009
Tuesday, July 21, 2009
Health Care Bill Less Likely to Pass Soon: Investment Considerations
In the New York Times article Democrats May Limit Tax Increases for Health Care Plan, the real news is the likely acceptance by the President that this priority of his is going to involve a longer time line than he wishes:
But rather than repeating his demand that each chamber of Congress pass a health care bill before the August break, Mr. Obama emphasized the need to reach a final agreement by the end of the year. “So let’s fight our way through the politics of the moment,” he said. “Let’s pass reform by the end of this year.”
Despite White House insistence to the contrary, the end-of-year deadline suggested that Mr. Obama was backing away slightly from his timetable; previously he had called on Congress to send him legislation to sign by mid-October.
Given EBR's focus on generating income with one's capital (or else owning gold to profit from or at least keep up with inflation), it brings the reader's attention to Eli Lilly, which yields 5.9%, sells for 8 times this year's estimated earnings and has rising earnings estimates both for this year and next year. In addition, while its market cap is close to $40 B, a small number of super-giant pharma companies could acquire it. The long-term chart of LLY happens to stink, but yours truly owns it. The stock is back where it was a dozen years ago. A previously-miserably run company that appears to have stabilized is Bristol-Myers Squibb ("BMY"), which yields 6.2%.
This spring, EBR mentioned a small number of stocks with strong fundamentals and strong long-term and short-term charts. Amongst them was Teva ("TEVA"). Teva recently hit an all-time high, has a long-term growth rate in the high teens, yields as much as cash in the bank (1.2%), and sells at 12 times estimated next year's earnings. This has been a beautifully-run (Israeli) company that has delivered for shareholders while being uninvolved in the various shenanigans afflicting so much of American industry.
None of LLY, BMY or TEVA play the stock buyback game to a significant extent. Teva can win regardless of the fate of health care reform. It is felt at EBR that valuations on LLY and BMY are low enough that P/E risk is low even if "Obamacare" passes, and that if it fails, P/E and dividend yield could allow for substantial long-term returns to shareholders.
Note: The author of this post owns TEVA and LLY and may sell either without notice. None of the commentary herein constitutes advice to anyone to buy or sell any security.
Copyright (C) Long Lake LLC 2009
But rather than repeating his demand that each chamber of Congress pass a health care bill before the August break, Mr. Obama emphasized the need to reach a final agreement by the end of the year. “So let’s fight our way through the politics of the moment,” he said. “Let’s pass reform by the end of this year.”
Despite White House insistence to the contrary, the end-of-year deadline suggested that Mr. Obama was backing away slightly from his timetable; previously he had called on Congress to send him legislation to sign by mid-October.
Given EBR's focus on generating income with one's capital (or else owning gold to profit from or at least keep up with inflation), it brings the reader's attention to Eli Lilly, which yields 5.9%, sells for 8 times this year's estimated earnings and has rising earnings estimates both for this year and next year. In addition, while its market cap is close to $40 B, a small number of super-giant pharma companies could acquire it. The long-term chart of LLY happens to stink, but yours truly owns it. The stock is back where it was a dozen years ago. A previously-miserably run company that appears to have stabilized is Bristol-Myers Squibb ("BMY"), which yields 6.2%.
This spring, EBR mentioned a small number of stocks with strong fundamentals and strong long-term and short-term charts. Amongst them was Teva ("TEVA"). Teva recently hit an all-time high, has a long-term growth rate in the high teens, yields as much as cash in the bank (1.2%), and sells at 12 times estimated next year's earnings. This has been a beautifully-run (Israeli) company that has delivered for shareholders while being uninvolved in the various shenanigans afflicting so much of American industry.
None of LLY, BMY or TEVA play the stock buyback game to a significant extent. Teva can win regardless of the fate of health care reform. It is felt at EBR that valuations on LLY and BMY are low enough that P/E risk is low even if "Obamacare" passes, and that if it fails, P/E and dividend yield could allow for substantial long-term returns to shareholders.
Note: The author of this post owns TEVA and LLY and may sell either without notice. None of the commentary herein constitutes advice to anyone to buy or sell any security.
Copyright (C) Long Lake LLC 2009
Subscribe to:
Posts (Atom)