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jstratt

jstratt
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  • Gilead Will Keep On Rolling [View article]
    Keep the faith fellow GILD shareholders.

    The HCV market is still growing as the world opens up. GILD has several arrows in its quiver.

    1) Counting scripts suggests that good earnings growth will continue for this year.

    2) GILD is trying to acquire some additional revenue sources and likely will achieve that goal

    3) They could easily buy 10% of shares in the rest of 2015 and 2016 to provide 10% growth.

    4) The pipeline is building

    5) GILD leaders have been excellent stewards of capital

    When HCV does begin to decline GILD will have a problem to overcome. But that time is not here and shares are trading as if decline was already a certainty. I find it hard to believe GILD will deliver less than $12.00 EPS in 2015 and that GILD should trade below a 10 PE.

    GILD has in place the ability to grow EPS by 10% in 2016 thru share buybacks alone. That should temper competition and its effects. So stay long and strong!

    We know that GILD is trading with analyst estimates of $10.79. GILD could easily jump to $14.00+ EPS before it levels off or starts to decline. Even if that doesnt happen lots of other investments have the ability to correct in a much more substantial manner to find FMV.

    Finally it is probably good that people are no longer writing comments about GILD suggesting people "bet the farm". If the situation does change we will likely figure it out here on SA before the analysts, just as we have for the past 2 years.
    Jul 10, 2015. 12:33 AM | 2 Likes Like |Link to Comment
  • Arch Coal - Bond Exchange Is A Win-Win [View article]
    I bought BTU today.

    They have a market cap barely higher than FCF and no debt due until 2018. For all the negativity about coal, I dont see a decline in demand on a worldwide basis. India is building coal plants rapidly as an example.

    Part of my thought process was that BTU is stronger than some other coal companies as a shakeout ensues. When the dollar weakens coal exports will be more profitable as well.

    Best of all is if things turn, coal companies scream higher.
    Jul 9, 2015. 04:59 PM | 2 Likes Like |Link to Comment
  • IBM Just Changed The Game [View article]
    I would just be happy if IBM could invent a few extra dollars of profit.

    My prediction is that they will post a strong beat of only a 13% decline in revenue rather than the 14% decline expected. But dont worry it will all be due to currency effects.

    I also predict that they will strongly beat the $3.79 EPS estimate and post $3.85. That will only be a 15% decline from last year.

    Best of all IBM will write the headline in their earnings release "IBM beats EPS $3.85 vs the $3.79 analyst est."

    Finally I predict that IBM will announce that they see a write off coming in the 4th quarter as they "realign to maximize growth".
    Jul 9, 2015. 04:27 PM | 7 Likes Like |Link to Comment
  • More on PepsiCo's FQ2 [View news story]
    I think the market figured out what I stated above as PEP is now down for the day. Just accepting what is in a PR notice at face value is less than satisfactory.
    Jul 9, 2015. 03:58 PM | Likes Like |Link to Comment
  • Biotech At A Fraught Mid-Year: An Overview And Look Ahead [View article]
    Excellent article!

    I have much less patience with small cap stocks at their current valuations. Also I got rid of REGN about a month ago.

    While I think small cap biotech valuation is high, the demand for drugs to fill pipelines of the big biotech players is huge. Still to maintain a proper risk profile I have eliminated most small cap biotech focusing on GILD, AMGN, CELG and BIIB.

    Interestingly enough in pharma I find the bubble or overvaluation in AZN, LLY, BMY, PFE, NVS who in the best possible pharma growth environment have negative 5 year growth. Not only have they declined in earnings but the stocks have risen as if they are sitting on the fountain of youth. Some PE's to make the point are 64, 42, 50, 23 and 22
    Jul 9, 2015. 03:36 PM | 1 Like Like |Link to Comment
  • More on PepsiCo's FQ2 [View news story]
    Interestingly I see a nearly $1 bil drop in revenue to $15.92 from $16.89.

    Earnings were exactly the same $1.98 bil. EPS driven by share repurchases did come in higher by 3.1% ($1.33 vs $1.29 last yr)

    A 22.59 PE is kind of high for stagnancy but not perhaps with a 3% dividend in today's interest rate environment.
    Jul 9, 2015. 09:35 AM | Likes Like |Link to Comment
  • If Revolver Raids Are Coming This Fall, How Exposed Is Your Bank To Oil & Natural Gas? [View article]
    Excellent article!

    You make a very good point. I have never seen an an Oil crash without loans being called in and assets sold. While you are at it in the 7 years since 2008 I am guessing other loan issues have been building up.
    Jul 9, 2015. 08:54 AM | Likes Like |Link to Comment
  • ConocoPhillips Is A Buy [View article]
    I like COP even though I sold all but a few shares last year. I bought a 10% stake at $59 a couple days ago.

    In a couple years I do expect Oil to be at $75 and it is a reasonable value for the long term. That said, Oil is a cruel liquid that historically has extracted money from all but the savviest of risk takers. The Oil I know will force some bankruptcy buyouts, will crush the weak and will stay down longer than anyone expects.

    So buy in stages and dont get greedy. I will buy another 10% stake soon. We probably have $120 Oil in 5 years. However we could have $30 Oil in the meantime. Just like any Oilman, if you invest you have to survive the collapse to enjoy the peaks.
    Jul 8, 2015. 11:49 PM | Likes Like |Link to Comment
  • Gilead Will Keep On Rolling [View article]
    GILD is a great value at present.

    I have all the shares I need though I would like to buy more.

    As for GILD, it is now a company that may likely have $16 bil in FCF and nearly a 10% FCF return. I would recommend splitting that FCF 50%/50% between share buybacks and pipeline/acquisitions. That would buy back 5% of shares.

    I would prefer an acquisition except that prices are much higher than reasonable valuations. At the same time Gild shares are a minimum of 30% undervalued.

    Also I like GILD's pipeline longer term but have a hard time seeing anything significant in the next 2 years.

    Finally if truth be known I wouldnt be surprised is GILD was kicking the tires on Juno along with others. Management at JUNO I think locked in their jobs for $1 billion rather than have to deal with a $8 billion buyout offer. Between the 30% of profit potential on the most successful programs and the ability to buy 30% of stock I figure CELG got 50% of profits locked up and JUNO is worth less now and not more.
    Jul 8, 2015. 11:31 PM | 2 Likes Like |Link to Comment
  • The Big Picture [View article]
    It is a shame that Peter will never understand the concept of investing.

    He is always waiting for bubbles and thinking we are in bubbles and cant allow himself to actually invest in anything. Except maybe gold!

    Naturally he is a great loser in investing except probably for the churn in customer portfolios. He is always thinking he is a great economic mind who just discovered something no one else ever thought of.

    The truth is if you are afraid to invest in anything you will gain nothing. If you are able to invest in a quality long term investment, even though it may drop from time to time the long term trend is up.

    From generational lows Peter holds on fearful and despondent since 2009. An investor who needs to live off an investment would have used up most of their assets if invested with Peter. Now they truly do have nothing and are more than extremely frustrated.
    Jul 7, 2015. 10:34 PM | Likes Like |Link to Comment
  • Celgene Rapid Growth Is Still Ahead For 2016 Through 2020 [View article]
    Excellent article!

    I like CELG because I trust its growth to be significant based on the pipeline. In a recent article DRx was correct that it is a little expensive.

    So far no long term investor has ever been victorious when selling CELG.
    Jul 7, 2015. 04:44 PM | 1 Like Like |Link to Comment
  • Offshore drilling recovery "further off than expected," Susquehanna says [View news story]
    RIG moved 10.8% today from low to high. That is a big move for 1 day.

    I might buy the next low!
    Jul 7, 2015. 04:05 PM | 2 Likes Like |Link to Comment
  • Gilead's TAF-Based Drugs Or ViiV-GSK's Triumeq, Which Is Better? [View article]
    Dr De

    Nice article!

    I like the setup into GILD's 2Q earnings. I never take anything for granted but GILD has a lot of positives leading into this event.

    If the quarter comes in as we suspect GILD could be forced to do an acquisition sooner or buyback an additional 5% of stock which is $8.45 bil at current price. If GILD management believed in $13.00 EPS and a true value of a 14 PE they would be paying $169 bil market cap X 5% = $8.45 bil.

    For that they would be getting about $13.37 bil in Fair Market Value and an extra $5 billion benefit over the cost. Given the huge difference between the market valuation and what I see as FMV that may be the best option.

    I would prefer an acquisition but am concerned they would be getting 80c for a dollar spent. I also like the CELG partnership approach given the huge price to acquire companies.

    Such an announcement would force shares higher and leave room to make an acquisition and improve pipeline.


    Jul 7, 2015. 03:56 PM | Likes Like |Link to Comment
  • Japan's Ministry Of Health Approval Of Harvoni Offers Additional Growth Prospects To Gilead Sciences [View article]
    Interesting perspective!

    I believe it was Milligan at the Goldman Sachs conference who said he expected the price for Harvoni to be higher than Solvaldi. I am guessing $45k.

    Now is the time to be estimating 2Q EPS.
    Jul 6, 2015. 05:42 PM | 4 Likes Like |Link to Comment
  • Which Stock Is A Better Investment, Gilead Sciences Or Its Provider Cambrex? [View article]
    Ptatty

    You make some interesting points. However consider

    1) The relative accuracy of the script counters who have been able to calculate the percentage of reported scripts and tie them rather closely to EPS for several quarters.

    2) Yes upon approval I expect Japanese to begin seeking treatment and some estimate for the future should be made.

    3) GILD leaders did suggest that Japan had an older population with more fibrosis. The insinuation was they were more in need. Experience to date seems to show that when presented with an effective GILD cure, there is no lack of demand anywhere in the world.
    Jul 5, 2015. 09:26 PM | 2 Likes Like |Link to Comment
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