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  • Why We're Huge Fans Of Gilead [View article]

    Thanks for some great information.

    Over the weekend I created some share price expectations on GILD for my own investing. Given various pieces of information I am expecting $25 billion revenue for GILD and $9.00 EPS for 2015.

    I took a wag at estimating the total HCV market at $140 billion in the US and $300 billion worldwide over the next decade.

    Those are conservative numbers and help me estimate a 2015 value at $140 per share.

    I could be well off the mark but the institutional analysts and the sell side analysts are far apart. As an example the institutional analysts appear to be estimating around $7.75 for 2015 EPS and the sell side analysts about $9.92.

    On a bullish note several factors could raise my conservative estimates considerably. Those include that the HCV market could be much larger than expected. Also the pipeline could yield great promise. After all GILD didnt pay $125MM for a license to fast track a drug unless billions were at stake.
    Nov 24, 2014. 12:38 AM | Likes Like |Link to Comment
  • Why We're Huge Fans Of Gilead [View article]
    I just saw a commercial from ABBV advertising to have people go to for information on treating Hepatitis C. I believe it was on ESPN during a Saturday college football game.
    Also noticed a another site sponsored by Gilead
    It isnt hard to see how cases can multiply with an advertising campaign.
    Nov 22, 2014. 11:06 PM | Likes Like |Link to Comment
  • Why We're Huge Fans Of Gilead [View article]
    Thanks, I enjoyed the perspective.
    Nov 22, 2014. 02:38 PM | Likes Like |Link to Comment
  • Is It Time To Shift Into European Equities? [View article]
    Thanks for an excellent article!

    I began raising my allocation to Euro area stocks this past week. I would recommend those interested view a comparison of S&P500 vs a Euro average or EFT.

    Normally I prefer my money to be invested in the US where I spend it. However the combination of events has the US dollar charging higher and buying more of anything Euro. The poor performance of the Euro economy and Russian aggression has also caused stocks to depress.

    I chose VGK to invest in as it is a low cost Vanguard fund. This year I have started early in arranging my portfolio for the year ahead. For those staying invested the market has been like having a direct line to Santa Claus for the past 6 years.

    Today the market looks and feels toppy. This investor is moving to overweight in Health Care, Consumer staples and large cap Europe. I have moved to underweight in Technology. While I always stay invested it does seem like a good time to reduce risk.
    Nov 22, 2014. 02:21 PM | 1 Like Like |Link to Comment
  • GE Sees Strong Returns On Its Industrial Internet Investments [View article]
    Some thoughts on investing in GE

    - As the markets hit new highs GE shares have now climbed above even for the year and are up less than 1%.

    - A 10 yr view vs the S&P500 is a fair indicator and shows the S&P up 70% and GE down -26%. Worse the gap between the two has increased every year

    - Looking forward a 20.62 training PE for GEs performance is very rich

    - Do investors ever tire of hearing about things like organic growth of industrial segments. Perhaps it would be ok to also look at important #s like Cash Flow from Operating Activities

    2011 33.36 bil
    2012 31.33 bil
    2013 28.58 bil
    ttm to 27.66 bil

    I am suggesting that as we enter the 7th year following the market crash GE should be doing more than just trying to recover.

    I also suggest that with $37.26 of debt for each share, GE is not as safe as they would have you believe. Especially when some of that financing is short term Commercial paper.
    Nov 22, 2014. 12:04 PM | 1 Like Like |Link to Comment
  • Another Euro Crisis Could Derail Stocks [View article]
    I am a little more positive on Europe and invested more in Europe recently.

    Your 1st chart shows the S&P500 surging far while European stocks have dropped. I believe the divergence will be reduced in the year ahead. Great large cap world wide companies selling for 20-30% less.

    Some points to consider

    - The rise in the dollar should help the European markets.

    - Suddenly Europe is challenged by Russia for parts of eastern europe and their business. In a sense Europe will need to compete economically with growth to strengthen the European Union.

    - While everything looks wonderful in the US today we all know that can change. At the G20 meetings Europe was tasked with pulling their weight on growth and I think they will try to do so.

    I would recommend investors do a S&P500 10 yr chart and overlay a Euro stock average or ETF. I used VGK as a comparison. The averages track closely until the past 2 years with the S&P500 up 70% vs 11% for VGK.

    My bet is convergence ahead!
    Nov 22, 2014. 12:35 AM | Likes Like |Link to Comment
  • Why We're Huge Fans Of Gilead [View article]

    Bear in mind I am long GILD and wanting it to go higher. Therefore I am not trying to underestimate the number of patients.

    I will say that last I had heard it was 3MM estimated infected in the US many of which arent yet aware of it.

    Regarding the patent issues I presume GILD will prevail but may have to make a settlement.

    One analyst did put the 20% share of HCV market into his model and ABBV stated that was their expectation. I feel Sovaldi/Harvoni are hard to beat but have no way of predicting 10% or 20% myself.

    Personally I think it is very possible GILD will destroy the competition, beat legal challenges and keep a growing HCV market far beyond what is expected. Even if that doesnt happen I am bullish on prospects for GILD.
    Nov 21, 2014. 11:39 PM | 1 Like Like |Link to Comment
  • Why We're Huge Fans Of Gilead [View article]
    I believe in GILD but I wanted to suggest why GILD trades like it does currently. Lets face it if analysts really believed the published EPS numbers GILD would trade at 20 x 2015 EPS est of $9.92 =$198.40

    I am suggesting that Institutional research analysts are projecting GILD 2015 EPS at $7.75 for the following reasons.

    1) ABBV will take 20% of HCV market share with new products in 2015
    2) Insurances will restrict treatment based on cost
    3) Work on 4 week future cures will reduce future revenue further
    4) Competition will drive down negotiated prices
    5) a bubble of those needing/wanting immediate treatment exists to some extent
    6) ABBV could be entitled to HCV settlement proceeds based on their patents
    7) a cured patient is gone in 8-12 weeks and must be replaced

    I dont necessarily agree with those reasons but I think it is important not to ignore why GILD trades like it does. GILD shares are 95% owned by institutional shareholders getting the best advise money can buy and using revenue models projecting out 5 years.

    All of that said I believe GILD will match the $7.96 4Q EPS estimates and would trade at a 12.63 ttm PE based on the $100.53 close. That will in my mind force GILD up to $120.

    PS It takes pretty dire assumptions to value GILD at less than what I call the dead carcass pharma firms with declining revenues for a decade running.
    Nov 21, 2014. 06:49 PM | 1 Like Like |Link to Comment
  • Apple + IBM Partnership 3: Part Of The Long-Term Strategic Play [View article]
    I believe much is being made of nothing.

    This is in my mind an IBM attempt to try and get associated with AAPL. They are creating a few apps for AAPL so AAPL is happy to oblige. Investors so far have not been faked out by this IBM promotion.

    In the end an inspired programer will create a much better product than an IBM created app.
    Nov 21, 2014. 01:00 PM | 2 Likes Like |Link to Comment
  • Sanofi Beats The Drum [View article]
    I think the drum beat SNY as it was down 3%.
    Nov 20, 2014. 05:29 PM | Likes Like |Link to Comment
  • Is IBM Suddenly Vulnerable To A Takeover? [View article]
    Crazy talk that I hadnt considered. Just a few thoughts

    - nothing is too big anymore to be taken over or attacked by activists
    - IBM has a horrible CEO who seems to be steering it into the ground
    - IBM in the last quarter withdrew all guidance to be updated in January
    - a split off of Sys & Tech (hdwe) is a possibility
    - 431000 employees is a lot and doesnt sound efficient for a tech company
    - It is hard to envision a US merger partner

    IBM is a valuable company with disasterous leadership. One way or another something will change. Until something happens it is hard to see the stock price appreciating.

    The current strategy is basically to reduce the share count faster than the decline in revenue/earnings. That is quite a race!
    Nov 20, 2014. 12:26 PM | 7 Likes Like |Link to Comment
  • Global drug tab will breach trillion dollar mark this year [View news story]
    This news is important for those looking to have a portfolio with some growth in it.
    Nov 20, 2014. 11:36 AM | Likes Like |Link to Comment
  • General Motors: 3.7% Dividend Yield And 50% Appreciation Potential Make It A Buy [View article]
    Thanks for an interesting article!

    I try to expand my knowledge of stocks that I havent previously invested in. What would convince me to invest in GM would be the logic behind analysts projecting huge increases in EPS in the coming quarter and year.

    As expected GM has underperformed the S&P500 when measured from 1 mo up to any length you would want to measure.

    I suspect GM could be a good trade but with earnings estimates declining for now so will I.
    Nov 20, 2014. 11:33 AM | Likes Like |Link to Comment
  • General Electric Capital Corporation: The 171st Best Bond Investment [View article]
    Don I appreciate the value that you provide with an article like this as many people would incorrectly assume GE has little risk. On that score I would just note that GE has $374 billion in debt. On 10.04 billion common shares outstanding that is roughly $37.25 of debt for each share.

    On the other hand GE has some advantages for bond investors in that it is

    1) Very well diversified conglomerate
    2) measured against pure banks should perform better in tough times because it does have other quality assets
    3) Due to size and scale of operations, incl 300k employees a national interest in GE does exist
    4) Unsophisticated investors would be able to keep more informed on GE bond status
    5) $21 billion in free cash flow
    6) 2.02 Current ratio (current assets/current liabilities)

    It should be noted that reports indicate that inside GE the 4th largest bank in the country is operating.

    Diligent investors will gain from reading a rare article on GEs credit quality. Over the years few investors have adequately understood GE and paid for it.
    Nov 20, 2014. 09:51 AM | 1 Like Like |Link to Comment
  • IBM fuses e-mail with analytics, social tools [View news story]
    For a company in the email business one would have thought they might have considered that 5 or 10 years ago.

    Since it is IBM it is likely companies were dropping Lotus email so now they try to improve it as a last ditch effort.

    Based on history next comes running Lotus into the ground and having to give it away.
    Nov 19, 2014. 08:34 PM | Likes Like |Link to Comment