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jstratt

jstratt
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  • Verizon's First Quarter Results: What To Like & Dislike [View article]
    I will add a few thoughts thinking perhaps one or two readers might have an open mind.

    - buying the VOD stake meant eliminating huge spending on FIOS. More debt isnt a good option.

    - $110 billion debt is a big deal even in the high debt telecom industry. While it was a good risk to take, VZ needs to build up the liquidity to handle it.

    - I thought it was a good quarter for VZ but if the competition forces prices lower it will come out of profits and cash flow

    The upshot is in my mind both T and VZ have more risk to share price and dividend than I thought 6 months ago. T because of the additional risk now to the DTV merger and VZ because the competition may force it to drop prices.

    I do like VZ and the growth and leadership strategy. But if TMUS and GOOGL for instance teamed up to compete consequences would arise. It might not take a GOOGL entry either as TMUS and Sprint are pressing hard.

    I own a small amount of T and more of VZ.
    Apr 25, 2015. 11:35 PM | Likes Like |Link to Comment
  • MannKind Corporation: A Good Risk/Reward Play For The Long Haul [View article]
    I have little specific knowledge of Afrezza or MNKD.

    My investment was made solely on the product approval and the idea that this has to be a better way than injections for at least some diabetics.

    Some additional uninformed thoughts

    - The Chmn founder and namesake retired which isnt a ringing endorsement
    - Sanofi may not be the best partner
    - The debt doesnt bother me, companies can get debt renewed today
    - If it takes off, the market is huge and growing
    - Lots of big money, smart money and dumb money is ignoring MNKD
    - In the end if an approved product has merit, it will succeed
    - I wouldnt bet my lunch money on it

    Good Luck fellow investors!
    Apr 25, 2015. 12:22 AM | 8 Likes Like |Link to Comment
  • Merck's HCV combo shows cure rates of 60 - 100% in three genotypes [View news story]
    Vince

    Thanks for alerting me to the ABBV Q&A. I think I will stick with the rough estimate of a $20 bil Hep C market for my investment purposes.

    Also I acknowledge some huge estimates by others but I think I want to temper my expectations to $2.50 which is still a strong beat. The 2Q forecast will be interesting. I am also expecting 3Q to be significantly higher than last year given the warehousing of patients that preceded the introduction of Harvoni.

    In 2016 which is what this article references GILD appears to have significant advantages. I expect GILD to maintain a strong leadership position with the best product on the market. Given my view that the world market comprises 20MM US $ equivalent patients I am less concerned about 2017-2020.

    GILD in my mind has everything within its grasp to control the future including buying other biotech companies with promising research to diversify the pipeline, share buybacks and opportunities in NASH, HBV, Oncology, Cardiovascular and Inflammation.
    Apr 24, 2015. 11:00 PM | 2 Likes Like |Link to Comment
  • Merck's HCV combo shows cure rates of 60 - 100% in three genotypes [View news story]
    Regarding GILD Revenue

    It is time to start getting serious about GILD results next week so I am starting with Revenue and will add a few thoughts.

    - GILD 2014 Revenue $24.89 bil
    - GILD analyst estimates 2015 $28.46 bil
    - 4Q Rev x 4 ie 4Q run rate $29.26 bil
    - HCV script growth est 9k in JAN growing to 11.8k in MAR, 31% increase
    - ABBV stated still expecting $3 bil run rate end of year, states published data underestimates market significantly. HCV Mkt est $3 bil/.15 mkt share=$20 bil total HCV market
    - HIV market steady growth
    - World market kicking in
    - new products incl TAF
    - est 20MM US $ Hep C patients worldwide with 200k treated

    Feel free to add to or shoot holes in my revenue thoughts. I am finding it hard to be bearish on GILD revenue for 1Q or for the year.
    Apr 24, 2015. 05:26 PM | 1 Like Like |Link to Comment
  • Biotech Beat: Amgen And Gilead News [View article]
    Interesting article!

    I also saw AMGN up big after a strong beat on earnings in after hours, and then nothing the next day. This is the first explanation I have seen.

    Both GILD and AMGN are what I would call blue chip biotechs. They offer entry into a growing business at a reasonable price. One can invest in a growing company in a growing industry for the long term.
    Apr 24, 2015. 08:59 AM | Likes Like |Link to Comment
  • 2 Reasons AT&T Is The Better Dividend Investment Than Verizon [View article]
    Buffalo

    I would reply that the latest full year cash flow figures I provided are much more accurate than your quarterly data.

    FCF 3.72 - DIV 9.55 = -5.83 bil

    and not surprisingly T borrowed an additional $5.62 billion in 2014.

    The Inc Stmt shows consistently declining NI. The BS shows increasing debt.
    Apr 23, 2015. 10:07 AM | Likes Like |Link to Comment
  • A Discussion Of Amgen's Q1 Results, With Updates On Its Pipeline [View article]
    Thanks for an interesting article!

    AMGN is trading at 17.74 X 2015 earnings estimates. I dont find it to be a great bargain or as having the sizzling hot potential of the hottest biotech stocks.

    At the same time it has beaten the S&P500 by 100% over the past 10 years. I also fondly remember in 2008 when stocks were crashing, my AMGN shares held steady in the low $50s.

    AMGN has treated me better than many of my other stocks as it is up 48% over the last 52 weeks. Essentially I agree with DrX but thought a longer term view could be helpful.

    It does help to be in a growing industry.
    Apr 23, 2015. 09:49 AM | 1 Like Like |Link to Comment
  • Gilead Buying Vertex? What's The Use? [View article]
    Excellent article!

    Thanks for illustrating the pipeline potential. One of the best attributes of GILD is the continual innovation of its products. As a long term shareholder I think GILD will make acquisitions that compliment and extend their current emphasis.

    HIV and Liver diseases are progressing well in the pipeline. Oncology, Cardiovascular and Respiratory/Inflammatory are current areas in the GILD pipeline that could benefit from the additional investment.

    Buying a $5-10 billion company with promise as well as partnering with others to fund promising research would make more sense. GILD is much to smart to spend its capital making a quick buy of something where it doesnt add value in the process.
    Apr 22, 2015. 12:45 PM | 2 Likes Like |Link to Comment
  • 2 Reasons AT&T Is The Better Dividend Investment Than Verizon [View article]
    Buffalo

    I doubt I could prove to you that the Sun rises each morning. From the T Stmt of Cash Flows for 2014 and Yahoo Finance.

    NI $6.22 bil
    DIV $9.55 bil
    FCF $3.72 bil
    Apr 22, 2015. 10:31 AM | Likes Like |Link to Comment
  • 5 Reasons To Consider Gilead [View article]
    Excellent article Dave!

    Tuesday is an interesting day with GILD up over $4 as I write.

    Yesterday I commented that GILD would probably make an acquisition. Today Vertex is in the news as a possible acquisition. I dont think that will happen. History tells me GILD will be patient and has the ability to win whichever takeover battle they choose.

    The next 10 days leading up to earnings are going to be interesting. Will GILD deliver big? I think they have a chance.

    - profitability could surprise as GILDs 87%-90% margin est suggests
    - perhaps world revenue will be significant
    - maybe the recognition that a decades long plan to cure a disease becomes apparent


    If anyone wants to make their prediction I am on record with $2.50 EPS and $7+ billion revenue. Analyst consensus is $2.31 and $6.89 billion
    Apr 21, 2015. 02:47 PM | 5 Likes Like |Link to Comment
  • IBM: Dividend Increase On The Way, Why I'm Expecting A Double-Digit Raise [View article]
    I was a long term shareholder of IBM and I will likely become one again someday. Further I have made some harsh comments regarding IBM and the leadership team. I feel I should explain.

    If you listen to IBM leaders or read the earnings release or transcript you would think IBM is a wonderful opportunity. They paint a picture like Picasso and write narrative like Ernest Hemingway. In order to do that they omit most of the business and give little pieces like a 30% increase in System Z which is a $1 billion business they have broken out like it is an entire division. Same with cloud, they try to hide real numbers and emphasize huge growth.

    When you try to look at reality like perhaps Revenue here is what you get

    2012 $102.87 bil $24.09 bil debt2013 $ 98.37 bil $32.86 bil debt2014 $ 92.79 bil $35.07 bil debt2015 $ 84.15 bil estSo what is IBM worth? I dont know but the number is decreasing. Further every time I try to verify a management statement, I come away less than satisfied or worse.I want verifiable proof of something positive like revenue. Managements interpretation of results... not so much!
    Apr 21, 2015. 01:54 PM | Likes Like |Link to Comment
  • Verizon profits, revenue rise as churn declines [View news story]
    VZ reported a better quarter than I expected.

    To me VZ appears to have stiff armed the huge competitive threat and actually moved ahead.
    Apr 21, 2015. 11:11 AM | Likes Like |Link to Comment
  • 2 Reasons AT&T Is The Better Dividend Investment Than Verizon [View article]
    I have been a holder of both companies but where I used to hold T I now hold VZ. I think T will report earnings tomorrow and VZ just reported. The reasons I invest in VZ vs T are as follows.

    - T pays a higher dividend but it is paying 155% of its earnings which sooner or later will bring its own difficulties

    - VZ builds value into its business in a consistent manner and reaps the benefits from that including being rated as the best wireless provider by most raters. T is trying to buy businesses to make up for lack of internal growth.

    - Cash flow illustrates a big difference with VZ generating $11.44 bil FCF and T generating $3.72 bil.

    - T lowered prices in 2014 to compete and VZ did not feel the need to lower prices to compete to the same extent.

    My point is that when I looked out a few years ago I saw better opportunity with VZ and over the past 5 years VZ stock is up 80% and above the S&P500 77%. T is up only 25%.

    I think the forward view is similar and that VZ will continue to rise at a faster rate than T. So the investor should weigh carefully whether they need an additional 0.80% dividend return vs a 55% difference in the share value over 5 years.

    A company that has to borrow money to pay its dividend is generally going to have lower forward prospects.
    Apr 21, 2015. 10:10 AM | 4 Likes Like |Link to Comment
  • IBM: Dividend Increase On The Way, Why I'm Expecting A Double-Digit Raise [View article]
    The author is a dreamer...

    Lets start with only $1.1 billion in FCF generated and recognize they borrowed another $1.7 billion to get through the quarter.

    Then lets look at revenue which was down 12%. If you dont count businesses they ran into the ground and count differently why there is no shortage at all.

    What you are seeing is decline. Consistent long term decline that has now spread to every division and every market in the world. It finally hit the ultra profitable software division last quarter and continued again in 1Q.

    Most any business mind can see that IBM needs to use its cash to build new business to replace its older diminishing and fading products. Even stock buybacks are slowing down. IBM will increase its dividend slightly but the days of double digit increases are over.

    Rometty has a perfect streak of 12 straight quarters of decline. She should be terminated along with the BOD and replaced.
    Apr 20, 2015. 11:37 PM | 6 Likes Like |Link to Comment
  • Gilead Sciences: Serious Cash Means An Acquisition Could Be Coming Soon [View article]
    Excellent article!

    I tend to agree as GILD leaders are financially very savvy. They understand that a pipeline that is properly valued would significantly raise the company's valuation.

    As an example a $10 billion acquisition that raised the GILD PE by 3 points to say 14 from 11 = a 27.27% increase on a $150 billion market cap = $190.91 billion. My calculation is that GILD is trading at 11 times trailing 12 month earnings after 1Q is reported.

    So a $40 billion increase potential from a $10 billion purchase. Even if one didnt believe my calculation is correct it would be hard to argue against some level of increase in PE valuation.
    Apr 20, 2015. 03:51 PM | 10 Likes Like |Link to Comment
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