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Shankar N

 
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  • Floating A Soap Company: The (Hi)Story And The Now Of Procter & Gamble [View article]
    Thanks for sharing your thoughts with us meckstroth. This NYTimes article details a bit more about their exit from pharma business http://nyti.ms/1bqi7aY
    Oct 2 03:16 AM | Likes Like |Link to Comment
  • Floating A Soap Company: The (Hi)Story And The Now Of Procter & Gamble [View article]
    Hello RWMostow,

    Sorry for making you read it over and over. It's a typo and my fault. It should have been "At this size they can ill afford to stop bringing in new breakthrough products to the market."

    Thanks a lot for your time.

    Shankar
    Oct 2 02:59 AM | Likes Like |Link to Comment
  • Can GlaxoSmithKline Reclaim Its Lost Glory In The Next Decade? [View article]
    Hello Todd,

    I didn't explain the reason behind using a discounted earnings model projected for ten years. I will try to do it here.

    1. With respect to the discount rate, I think my perception is very similar to what is explained by our fellow author here: http://bit.ly/1hhufbr

    2.The reason I use earnings instead of FCF is to reduce the amount of assumptions we need to do for the future. When using the EPS model we can find the market's expected growth rate instead of relying on multiple assumptions.

    As I tend to use the same discount rate for all companies, it gets easier to find out how much the company needs to grow in the next ten years to support the valuation. To make it easier to understand I have created a list of tables in my instablog http://bit.ly/1hhufbt. Now you can easily find out which company has to grow faster to support the valuation and analyse which one has the best probability to get there. (The post looks a bit ugly, will edit as soon as I get some time)

    3.Your 3rd question clearly shows how easy it is for you to find out how much the company needs to grow to get to that point. Its not that bad to assume a decently growing well known company to be in the P/E range of 15 to 20 (after ten years).Most probably it should be closer to the industry average for a company like GSK.

    I believe the valuation to be fair because GSK can grow at 5% to 7% range for the next ten years. If earnings are going to grow next year then forward P/E will be low and that only helps our cause.

    I know valuation is a huge topic and there are so many different ways to get it done. I just prefer it this way and I am always ready to improve on it.

    Thanks for asking the question Todd.
    Shankar
    Oct 1 06:15 AM | Likes Like |Link to Comment
  • Betting On Botox: The Allergan Report [View article]
    Thank you, Crease1234!
    Sep 20 02:20 AM | Likes Like |Link to Comment
  • Is It Time To Buy Teva? [View article]
    Thanks Dan. You actually made me do something else. I am mailing Teva to get some detail about margins for branded pharma and generics. Would be nice if they respond. Will keep you posted.

    I am starting to love seekingalpha!!
    Sep 23 12:52 PM | 1 Like Like |Link to Comment
  • Is It Time To Buy Teva? [View article]
    Thanks Dan. I have already written about the assumptions clearly under the table with a *. Not sure if you read this. ------ "So if we take out Copaxone from 2011 sales and assume the net margin to remain the same, we arrive at a net income of $2221.12 million with an EPS of $2.49, resulting in a P/E of 16.08."

    I don't mind adding another column with margins but what margin will be correct. Once again the question of the margin used is too high and too low will come into the picture.
    Sep 23 11:16 AM | 1 Like Like |Link to Comment
  • Is It Time To Buy Teva? [View article]
    Thanks Dan. I just removed Copaxone sales of 3.57 billion from 2011 sales and calculated net income and EPS (assuming the net margin to remain the same). Teva's 10 year (2002-2011) net margin is 14.78 and 2011 net margin wasn't way off from there.
    Sep 23 04:55 AM | 1 Like Like |Link to Comment
  • Is It Time To Buy Teva? [View article]
    Thanks for some great insights Ozcutty. I agree with you. As The Hammer suggested FCF calculation would have been the best method to zero in on the right value.

    I read a lot about Copaxone expiry affecting the company and why Teva is falling because of that. Just wanted to find out if its a reasonable assumption. I know I sort of did a worst case analysis to see what happens if Copaxone sales drops to zero today ( we know its not going to happen). Result - 16 times earnings after subjecting valuation to a worst possible outcome.

    I think Teva is suffering from a Patent Cliff Syndrome.

    With regard to the CEO part, I think there is some amount of pessimism in the market with respect to Teva and he is carrying the bulk of it. May be he paid a bit extra to buy those companies but acquisitions are never easy.
    Sep 23 04:42 AM | Likes Like |Link to Comment
  • Is It Time To Buy Teva? [View article]
    Thanks for your comments Steven Anthony and sailor27. I agree with you. Location seems to weigh a lot on Teva.

    Do you know any other company that has substantial manufacturing facilities located in Israel? Just to check how other stocks are doing and compare them.
    Sep 21 05:13 AM | 1 Like Like |Link to Comment
  • Is It Time To Buy Teva? [View article]
    Thanks for your comments, tavu23. Not sure if you jokingly said that. But to clarify your question.

    "Our executive offices and a substantial percentage of our manufacturing capabilities are located in Israel. Our Israeli operations are dependent upon materials imported from outside Israel. We also export significant amounts of products from Israel. Accordingly, our operations could be materially and adversely affected by acts of terrorism or if major hostilities were to occur in the Middle East or trade between Israel and its present trading
    partners were curtailed, including as a result of acts of terrorism in the U.S. or elsewhere. " ( Teva Annual Report 2011 - Page 14)
    Sep 21 05:06 AM | 1 Like Like |Link to Comment
  • Is It Time To Buy Teva? [View article]
    You are right Abra and I am right too. 2011 EPS Non GAAP - $4.97, 2011 GAAP EPS $3.09

    Teva investor relations link with EPS data http://bit.ly/OKTNzG
    Sep 21 01:32 AM | Likes Like |Link to Comment
  • Generic Pharma Companies To Watch [View article]
    Patent expiry of its 3.5 billion Multiple Sclerosis treatment Copaxone. It is also facing some serious competition in the market. They have racked up some debt and intangibles due to aquisitions.
    Sep 20 05:22 AM | Likes Like |Link to Comment
  • Decoding Emerging Pharma Markets [View article]
    Thanks for your comments. I agree, they should focus on developed markets and may be push for generics in the emerging markets. There has been too much hype on emerging market growth and how it will improve pharma sales. Its just not easy to be there
    Sep 19 06:44 PM | Likes Like |Link to Comment
  • Bristol-Myers Squibb: The Asset Problem And The String Of Pearls [View article]
    " And that's not unique to BMS". - I agree. Every company on that list has its own share of spin-off's, sell-offs, acquisitions and so on. Pfizer has bought and sold so many things, Merck spun of Medco in 2003 reducing its revenues in half. ( Medco had 757 million worth of Properties in 2003). But still they both increased their Asset value over time like most companies in the list.
    So its easy to expect Assets to go up and down year on year depending on your buy and sell. But what you want to see is Assets growing slowly along with revenue. That's why I used ten years worth of data, to remove the short term up and down movement and I kept the data standard across all companies by not factoring in the buys and sells for anyone. Same rule for all companies.

    But I do expect BMS to start investing in assets very soon if not already!

    You can have a look at the following chart. it might help you.
    http://seekingalpha.co...

    Anyways, what I expressed here is just my opinion, not a buy or sell rating on the stock. Thanks.
    Aug 31 07:37 AM | Likes Like |Link to Comment
  • Pfizer Repositions Itself To Stay On Top [View article]
    LoL. Just love the way you phrased your question. Pfizer actually has lots of litigation going on right now. Product litigation runs for six pages in the annual report and definitely some of them are going to cost them heavily.

    Pfizer has 87 projects in its pipeline, more than most of the drug majors. Phase 1 - 27, Phase 2- 30, Phase 3- 19, Registration - 11. Just two days back FDA extended its review of Pfizer's Tofacitinib, a arthritis drug. If approved the drug may bring in few billions in annual sales.
    Aug 24 02:59 PM | Likes Like |Link to Comment
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