Small businesses are also riskier and more exposed to competition. In a low rate environment stocks like JNJ, UTX,MMM, MCD, DD, trading below 20PE are not very expensive given an average growth of 3-8%. May be you can have a better price later, but if you await for years holding cash with no returns, you miss the dividend. So I think it is better to not be totally out of the market.
Ducati - JNJ PE is not 23.61. You are confused like many by non-recurring items. People said JNJ was expensive at $65 just because Buffet was selling. You have to use non-GAAP earnings, otherwise you will have problems to understand. JNJ is actually fairly priced and I have a target of $105, barring a recession that could drive any stock lower for some time.
Additionally demand is not high because this newly printed money is not going to consumer's pocket, but to the financial institutions, and they are using that money to buy speculative stocks without earnings.
I already showed you the example of KO in 2009. The revenue felt only by a negligible amount from $31.94B to 31, just 2.94%. The stock price fell because of forced selling, but the business remained sound. WMT showed even a growth in sales during the great recession, so your statement is generic and does not apply to all companies.
Excellent basis for a discussion. I agree with the shift of debt from private sector to the public and with the fact that the public sector can manage better that debt by printing. I agree with the danger of the new record margin debt (on the private side this time). I diverge from your analysis when you say that earnings are not sustainable in general. In 2008 the bubble hit mainly the housing and the financial sector. Stocks like KO had just an insignificant impact on revenue as I explained in another comment. So where is the bubble ? For me it is in the stocks with no or little earnings, like AMZN, CRM, WDAY, rising on highly speculative money. On the other side, JNJ, KO, IBM, PG, and other stocks with predictable and stable earnings are not in a bubble territory.
A compromise could be to give a temporary extension to the patent, but I do not see how an isolated gene can be eligible for patent. What is not totally clear is how much the other existing patents covering the method will work. There are different opinions on that issue, but I think that if MYGN spent money to get them, there is a chance that they can help. This is why I would buy the stock in the mid 20.
Yes, I hate biotech as investment since I lost money on Affimetrix in 2002. I am also cautious on tech, and did some mistakes trading BIDU. I shorted too soon and then went long too soon, but it is recovering.
I gave a quick look at GILD, and it is too expensive for me. I never pay 36x EPS for 11% growth. There is also a considerable amount of debt. Good company, but expensive.
I do not follow GILD, but never pay attention to PEG as it is based on wrong assumptions about future earnings made by non independent analysts. I am independent, so look at TTM PE and then make my own forecast about possible scenarios and future earnings. In this case I think the negative ruling versus MYGN has 90% chance, and the stock could drop, probably in the mid 20, not below 20. I also think it will be a good buy at these level as the ruling is not so important long term, for the reason I explained in my comments. A positive ruling (10% probability) can send the stock up to 40 and possibly 50 next year.
I do not compare the formulation of Coke to genetic testing. The similarity I pointed out is that like Coke did not patent water and sugar, so MYGN does not need and will not patent a gene as it is in nature, but a method, an utilization. I did not forecast MYGN will retain the patent on Isolated DNA even if it is different from the natural DNA, and even if patents on genes are in place from 30 years (MYGN bought some DNA patents from some Universities). My forecast showed in the article is that MYGN will lose this patent. Anyway even MYGN will put in place a general cancer test like Whole genome sequencing. This will be the future. Now I am awaiting to see the presentation of the prostate test by Genomic Health. It is more expensive than Polaris.
Where Is The Bubble? [View article]
In a low rate environment stocks like JNJ, UTX,MMM, MCD, DD, trading below 20PE are not very expensive given an average growth of 3-8%. May be you can have a better price later, but if you await for years holding cash with no returns, you miss the dividend.
So I think it is better to not be totally out of the market.
Where Is The Bubble? [View article]
Where Is The Bubble? [View article]
JNJ is actually fairly priced and I have a target of $105, barring a recession that could drive any stock lower for some time.
Where Is The Bubble? [View article]
Where Is The Bubble? [View article]
Where Is The Bubble? [View article]
The revenue felt only by a negligible amount from $31.94B to 31, just 2.94%. The stock price fell because of forced selling, but the business remained sound. WMT showed even a growth in sales during the great recession, so your statement is generic and does not apply to all companies.
Where Is The Bubble? [View article]
The Prospects For Angie's List: Contemplating Growth Potential And Competition [View article]
Where Is The Bubble? [View article]
Where Is The Bubble? [View article]
I diverge from your analysis when you say that earnings are not sustainable in general. In 2008 the bubble hit mainly the housing and the financial sector. Stocks like KO had just an insignificant impact on revenue as I explained in another comment.
So where is the bubble ? For me it is in the stocks with no or little earnings, like AMZN, CRM, WDAY, rising on highly speculative money. On the other side, JNJ, KO, IBM, PG, and other stocks with predictable and stable earnings are not in a bubble territory.
Myriad Genetics: Strong Results Ahead Of Supreme Court Decision [View article]
What is not totally clear is how much the other existing patents covering the method will work. There are different opinions on that issue, but I think that if MYGN spent money to get them, there is a chance that they can help. This is why I would buy the stock in the mid 20.
Myriad Genetics: Strong Results Ahead Of Supreme Court Decision [View article]
I am also cautious on tech, and did some mistakes trading BIDU.
I shorted too soon and then went long too soon, but it is recovering.
Myriad Genetics: Strong Results Ahead Of Supreme Court Decision [View article]
I never pay 36x EPS for 11% growth. There is also a considerable amount of debt. Good company, but expensive.
Myriad Genetics: Strong Results Ahead Of Supreme Court Decision [View article]
In this case I think the negative ruling versus MYGN has 90% chance, and the stock could drop, probably in the mid 20, not below 20. I also think it will be a good buy at these level as the ruling is not so important long term, for the reason I explained in my comments.
A positive ruling (10% probability) can send the stock up to 40 and possibly 50 next year.
Myriad Genetics: Strong Results Ahead Of Supreme Court Decision [View article]
The similarity I pointed out is that like Coke did not patent water and sugar, so MYGN does not need and will not patent a gene as it is in nature, but a method, an utilization.
I did not forecast MYGN will retain the patent on Isolated DNA even if it is different from the natural DNA, and even if patents on genes are in place from 30 years (MYGN bought some DNA patents from some Universities). My forecast showed in the article is that MYGN will lose this patent.
Anyway even MYGN will put in place a general cancer test like Whole genome sequencing. This will be the future.
Now I am awaiting to see the presentation of the prostate test by Genomic Health. It is more expensive than Polaris.