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jstratt

jstratt
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  • 2 Stock Bargains 'Hiding' In Plain Sight [View article]
    Thanks for an interesting article and also to SRB for the script information above.

    GILD is a great bargain and it is a little bizarre that several pharma companies that havent grown for a decade are trading at much higher multiples than GILD.
    Mar 6, 2015. 09:21 AM | 2 Likes Like |Link to Comment
  • General Electric: This One Chart May Spell 'The End' For Immelt [View article]
    thoughts on GE...

    The author managed to forget the all of the GE Capital transactions including an SIV by showing a GE produced chart.

    GE would have been bankrupt if not for recapitalization by the Government and Warren Buffett. This was due in part to borrowing in 30 day paper for long term capital.

    Immelt is an unqualified disaster as a CEO. The lethargy of GE is such that last summer a GE director came out and said GE was reviewing the Immelt 20 year tenure plan. That was likely the point of the decision.

    GE has problems not only with Immelt but in a culture that allows a 10 year negative return without any reasonable action being taken. The Board needs to be held accountable as well.

    Here we are 7 years after a GE collapse and no real change has been accomplished. If GE has quality financial assets why cant they be sold?

    Investors I believe are taking more risk than they understand with GE. It is a highly leveraged corporation with $365 billion in debt, 266.62% debt to equity, a 1.75% return on assets and only $16 billion in cash.

    I want to place that in context as I dont think GE will fail as even the worst credits can borrow money today at low rates and GE is not the worst credit. I do question whether in an event like 2008 GE is really in any better position today.
    Mar 5, 2015. 10:36 AM | 5 Likes Like |Link to Comment
  • CVS Health Wins Over Analysts As Significant Growth Expected In The Next 5 Years [View article]
    CVS has really performed well for many years.

    If you dont own it you should. If a pullback occurs you should consider adding to your position. You will get a growing long term business run by a management team that doesnt make many mistakes.

    My guess is the dividend growth investors will find rapid growth ahead at a double digit rate. Probably not at the 733% rate of the past 10 years however where it went from .15c to $1.10. I could see it doubling over the next 5 years.

    The growth I see in the future is

    - growing healthcare costs
    - growing services within stores (ie mini Dr Office services)
    - more stores

    Thanks for a great article!
    Mar 4, 2015. 12:32 PM | 2 Likes Like |Link to Comment
  • Bristol Myers' HCV Cocktail Has Gilead, AbbVie In Its Crosshairs [View article]
    a few big picture items

    BMY has had a decade of decline. Declining revenues and declining earnings. They have been nothing if not consistent in their decline. Today we are supposed to believe BMY is really a growth company and should support its 51 PE.

    Meanwhile GILD has grown 31% annually over the past 5 years and has demonstrated outstanding business acumen and leadership.

    If I were to place a 14 PE on a company, it wouldnt be GILD. GILD appears to look at the chess board and see 5 moves ahead. As for BMY I will let others wait for excuses as BMY likely continues its long term trend.
    Mar 4, 2015. 12:03 PM | 1 Like Like |Link to Comment
  • Amgen: The Best Biotech Stock You Don't Own [View article]
    Enjoyed the article!

    I also like AMGN and GILD. GILDs current $4 bil per qtr FCF run rate ($16 bil annual FCF) is hard to beat along with a very low PE. AMGN also is a great value and I see lower downside risk in these growing companies.

    I also like and own CELG, BIIB, REGN, ILMN. Still after the average biotech stock has more than tripled in the past 3 years common sense should advise caution. I note in addition to the huge runup in share prices.

    - biotech has largely moved together
    - medical as a group has moved much higher
    - valuation on potential is high
    - huge investment in biotech suggests lots of companies must lose to competition.

    Both GILD and AMGN appear to have less risk than many other growth alternatives.
    Mar 4, 2015. 11:37 AM | 1 Like Like |Link to Comment
  • Bank Of America: An Overreaction Creates A Longer-Term Buying Opportunity [View article]
    I still think in a good year BAC could possibly have Operating Cash Flow as high as its current market cap. That year probably isnt going to be 2015 but BAC does have some serious upside.

    Its value should be higher than 35.6% of the cash on the balance sheet. My guess is BAC could double in the next 12 months and triple in 5 years. Just the idle cash is worth almost $45 a share.
    Mar 3, 2015. 02:26 AM | 4 Likes Like |Link to Comment
  • Bristol Myers' HCV Cocktail Has Gilead, AbbVie In Its Crosshairs [View article]
    Thanks for the article!

    a few thoughts...

    - I think the testing was on a very small quantity of patients.

    - GILD is as dominant in HIV as it is in HCV. Couldnt they combine therapies into fewer pills and provide a superior treatment plan?

    - many of those patients wont be around by the time BMY gets approved

    Finally I have to say GILD has been masterful in the HCV pricing game. They shaved off the $90k customers, $80k customers... Now they have the cure of the century and the competition is going to try to out manuever them for the $25k-$50k customers.

    A price of $25-$50k in the developed world seems like a bargain for the cure of the century which will save many lives.

    I for one would hate to be investing against GILD with my money in HCV or HIV. Its about like entering a mule in the Kentucky Derby!
    Mar 2, 2015. 12:03 PM | 1 Like Like |Link to Comment
  • Bank Of America: Singled Out For 2015 CCAR Failure? [View article]
    Excellent article!

    I just wanted to offer how I would play BAC and a few observations.

    - I own BAC and will continue to hold it. For investors considering BAC I would recommend initiating a position as it is a very good value. Should it fall further you can add to the position.

    - As I recall from last year the transaction that caused an overstatement of capital was a non cash book value entry made years prior. My guess is it is that change which inspired the statement BAC now adds to its 10k. While a dividend may be impacted I do believe BAC will pass CCAR. Regulators do probably feel they approved an increase in the dividend of 300% on false pretenses.

    - I am not a fan of banking at this time in general, but I do think BAC is like a coiled spring. Earnings have been constrained, CCAR issues outed, restatement of capital, a myriad of bank investigations are all priced into shares.

    Fundamentally however BAC has probably never been stronger in terms of quality of assets, diversification of income, liquidity and overall risk.

    Some financial items of note include

    - Operating income dropped from 16.17 bil to 6.86 in the past year, about 58% on a nearly equal drop in Operating margin

    - where in a good year BAC could generate Operating cash flow not much below its $166 billion market cap it only generated $26.7 bil last year. I note its prior post 2008 peak was $129.7 bil OCF.

    - SGA expenses are 77.54% of the costs for BAC and BAC is leading the industry in reducing expenses which will lead to significant profitability.

    BAC stock has been very very good to me. In late 2007 as a crisis seemed imminent a sold all at $50+ and was lucky enough to buy back at $3.83 in Mar 2009.

    Right now I would be more afraid to sell my BAC shares and would consider more shares should it drop further.

    PS I have watched C liquidate its shareholders about every decade with a horrible business model based on lending to 3rd world countries. If not for a reverse split it would still be trading at $5.24 and it still has a negative Enterprise Value per S&P Capital IQ.
    Mar 2, 2015. 12:22 AM | 2 Likes Like |Link to Comment
  • Weekly Indicators: Warning Of A Poor Q1 GDP Edition [View article]
    I hope this is your hobby because the real investment money fits all of this information into back tested statistically valid economically models direct from a news feed on a real time basis.

    Your time would be better spent coming up with specific assumptions on specific investments. Perhaps your legal background would have led you to properly analyze the growth rate in the value of intangible property? Or even better to recognize that when Obamacare limited the governments right to negotiate drug prices that the Healthcare industry and biotech stocks in particular would explode.

    I am not trying to be critical but merely suggesting that the economic information in the article is dubious in nature and of limited value even though you did an excellent job of digging it out and presenting it.
    Mar 1, 2015. 09:56 PM | Likes Like |Link to Comment
  • Pharmacyclics: Is A $19 Billion Valuation Reasonable? [View article]
    Thanks for an excellent article!

    As a long term investor I have great interest in the biotech sector. At the same time investors have to be careful about valuations.

    I worry less about the GILD, AMGN type of stock with long track records of growth and reasonable valuations. The small companies come with big risk but also perhaps big reward potential. The $10-20 billion category does offer more concern. Also of concern is Oncology as almost every company seems to have significant research efforts in this area.

    In my opinion over investment is a big risk in markets. I see that in Oil where $1 trillion annual investments have brought more Oil than can be utilized. I think I see it in biotech as hedge funds are getting involved. Too much money competing for markets can be a bed thing!

    Enjoyed the article!
    Mar 1, 2015. 02:45 PM | 1 Like Like |Link to Comment
  • Value Oriented Investors Should Consider Amgen [View article]

    My first experience with AMGN came when an experienced investor bought shares around 1989. With a 15 PE he just wanted an opportunity to buy a stock that could really grow for a long time. He bought it and it dropped so he bought more investing a total of about $20k.

    Today those shares are worth about $1.5MM. AMGN has grown at an annual rate of about 20%-25% ever since. Today his lesson remains much the same. Buy it if you believe in it and just let it grow like a tree in your yard.

    - AMGN may or may not grow 20%+ but it will grow and is in a growing industry
    - Several years from now the price paid will be irrelevant
    - Some believe this is the Biotech century. I just remain reasonably assured that biotech will grow faster than most other businesses for a long time.
    - An investor today is lucky that a fair value to buy exists

    I also like GILD and CELG.
    Feb 28, 2015. 10:42 PM | 1 Like Like |Link to Comment
  • With Product Sales And Drugs In The Pipeline, The Future Looks Bright For Gilead Sciences [View article]
    I would just add that GILD closed 2014 at 94.26 and at $103+ is up over 9% for the year. That is an annual rate of over 50% should that pace continue for the rest of the year.

    The floor is rising and if 1Q EPS comes in at the average analyst consensus of a 52.7% increase the stock should be pushed higher.

    Really if you think about it the bearish position is that the Hep C market is declining in size. A bullish position sees larger budgets for Hep C around the world and limited competition. I am comfortable with a bullish position on Hep C.

    The reason I focus only on Hep C is because the market seems to only focus on Hep C at this time giving little valuation to HIV or the pipeline.
    Feb 27, 2015. 12:41 PM | 3 Likes Like |Link to Comment
  • You Can Absolutely, Positively, Retire Early... Maybe [View article]
    I will offer a perspective as I retired at age 55 but then got bored and 3 years later went back to work. The goal is valuable as you are striving for self sustainability. It then allowed me to play golf and spend more time with investments.

    The key is to save perhaps 20% of your salary and invest it, beginning as soon in life as possible. In an early job one of the best decisions I made was to allocate more to savings than I thought possible. To this day I have plans to grow assets each and every year even in retirement years.

    A young investor if anything like me will make many many mistakes but the process of saving and growing assets year after year gives a great opportunity for success.

    With regard to the purchase of stocks I believe in buying stocks you wouldnt mind holding forever. For the optimistic young person the biggest risk is taking more risk than they should take. At the same time the portfolio presented offers companies that were growing 20 years ago.

    Too many of these companies either have no growth or are in very cyclical industries. GE as an example is trading at levels it first reached in 1997. Some level of growth should be expected. In short I grew up investing in PG, GE, KO but the growth I saw 20 years ago isnt apparent today.

    I think perhaps an S&P500 Vanguard fund should get some investment along with some of the investments listed above. Then allow competition to drive your investments whether it is your stock picking or the S&P500 or other funds.
    Feb 27, 2015. 11:06 AM | 2 Likes Like |Link to Comment
  • Gilead's single tablet TAF HIV med equivalent to Stribild but easier on the body [View news story]

    Does anyone have a view on the impact TAF could have on future revenues or profits?
    Feb 27, 2015. 10:23 AM | Likes Like |Link to Comment
  • Notes On The 2015 IBM Investor Briefing [View article]
    I have lost confidence in IBM leadership. Rometty should be replaced for gross incompetence and the BOD also needs to be weeded out.

    After 3 years of continual decline that started exactly with her elevation to CEO, the time has come to move forward.
    Feb 27, 2015. 09:59 AM | 3 Likes Like |Link to Comment
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