Seeking Alpha

jstratt

jstratt
Send Message
View as an RSS Feed
View jstratt's Comments BY TICKER:
Latest  |  Highest rated
  • Drug makers face pushback on pricey meds [View news story]
    I must say it wasnt a hard decision to invest in pharma when ACA agreed to limit the government ability to negotiate drug prices.

    Must agree with Small Pharma that a cure for Hep C at up to $94.5k is a bargain to the cost of not curing. Also a cure is much different than paying a similar amount to increase the life span of a cancer patient by 2 months. Or to pay a huge amount to treat a condition for life.
    Nov 25, 2014. 09:37 AM | 4 Likes Like |Link to Comment
  • Verizon slumps on Citi downgrade; AT&T also off [View news story]
    I would just offer that I have invested in VZ as a lower risk opportunity to capture a reasonable return in 2015. a few notes...

    - wireless and wireline it is all growing
    - the author should consider the internet of everything
    - fears of competition are overblown and priced in
    - purchase from VOD is accretive to earnings
    - best in the business

    for balance

    - dont expect large dividend increases short term
    - debt to equity stretched
    Nov 25, 2014. 09:22 AM | Likes Like |Link to Comment
  • Be Careful With Gilead - It May Be Time To Take Profits [View article]
    Excellent comment

    thanks
    Nov 25, 2014. 08:57 AM | 2 Likes Like |Link to Comment
  • Be Careful With Gilead - It May Be Time To Take Profits [View article]
    Not much value in this article!

    GILD shares will be driven by Hep C in the next 6 months. Shares are priced suggesting a 20% decline in revenues. That is a very negative outlook but anything is possible. As an example PFE has had declining revenue for a decade and trades at a much higher PE.

    That GILD is being compared to PFE is an example of how crazy the comparisons are getting. My expectation is for moderate growth in 2015 and a 15 PE which would deliver significant upside.
    Nov 25, 2014. 08:47 AM | 6 Likes Like |Link to Comment
  • Investors Should Be Concerned About Gilead [View article]
    Thanks for an interesting perspective!

    There is no question GILD has been trading poorly for weeks. Lots of selling at open and close. At least insiders have stopped selling for now.

    I remain long and I am happy with GILD and the opportunity it presents. For instance a 12.6 PE based on 2014 earnings.

    thoughts

    - Insider selling stopped abruptly on Nov 7 as if insider information exists
    - Shareholders are recognizing that risk does exist
    - GILD shares priced for 2015 decline, my base case is continued growth
    - GILD HCV products are have had fantastic news recently
    - If HCV mkt is the size people think, lots of revenue for a long time
    - GILD I think has a higher HCV Gross Margin than the US Mint at 88%
    - GILD paying $125MM for fast track drug license suggests huge drug launch ahead
    - heard 1st TV Commercial on Hep C over weekend on Football game
    - Harvoni launch exceeding that of Sovaldi
    - Share buyback should help profit growth exceed revenue growth
    - GILD has excellent products but the stock will perform based on growth or decline of the huge HCV revenues and their 88% margin
    - It is possible to have a decline in 2015 or 2016 HCV revenues

    Good Luck!
    Nov 24, 2014. 04:22 PM | 2 Likes Like |Link to Comment
  • 4 Fundamental Reasons To Remain Invested In U.S. Equities [View article]
    Thanks for an interesting view!

    I have 3 areas I am moving toward for 2015 including the Healthcare area. Here is why!

    Healthcare

    Growth is near certain and as an example the $1 Trillion Pharma business is projected to grow by 7%. JNJ is a good holding so are many others.

    Europe

    Large cap Europe is paying 4.3% dividend and has underperformed the US for 5 years. Over the long term US and Europe equities merge so the huge difference probably due to QE will dissipate. The difference is 50%+ over the past few years.
    Consumer Staples
    The good old PG, KO, Foods etc. After huge gains for 6 years I want to both protect my gains as well as grow for the future.
    Underweight areas
    Technology
    After excellent gains I just dont understand technology valuation as well. I see wild allocations of capital at GOOG and AMZN. I see the IBM, HPQ, CSCO, ORCL types struggling. I see social having run far fast. I conclude I am not smart enough to predict technology just now. What to make of my AAPL which is up nearly 20% in 6 weeks or somthing like that?
    Equal Weight
    Energy
    adding on pullbacks and especially Euro energy companies since the strong dollar buys more shares
    Financials
    remain equal weight
    I always stay invested but have been derisking my portfolio. Continuing to hold biotechs GILD, CELG, REGN, BIIB, AMGN which have come a long way.
    Nov 24, 2014. 12:45 PM | Likes Like |Link to Comment
  • Why We're Huge Fans Of Gilead [View article]
    Enjoyed your view!

    I think GILD could dip into the $90s based on trading weakness short term.

    On the other hand if GILD meets its 4Q earnings it will be trading at a 12.6 ttm PE. Lets face it the market is pricing decline.

    So I happily hold my shares and dont see any further action until 4Q earnings are announced and guidance for the year ahead is given.

    Our views and assumptions if true should be quite profitable.
    Nov 24, 2014. 10:53 AM | Likes Like |Link to Comment
  • Why We're Huge Fans Of Gilead [View article]
    All

    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 HepCinfo.com 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 HepChope.com.
    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]
    Somedata1

    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 | 2 Likes 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
COMMENTS STATS
2,482 Comments
3,206 Likes