AbbVie Inc. (ABBV)

(A Top Pick May 12/20, Up 24%) He's sticking with it. There's more upside to come. Their biggest product was Humera, a massive drug. A few years ago, they bought Allergan and their Botox drug, which reduced company dependence on Humera for company revenues. ABBV has some new drugs in the pipeline that are reaching $1 billion in sales, so this further spreads the risk away from Humera. It trades at a cheap 9x PE and pays a 5% dividend. Warning: in 2023, Humera goes off patent and that will mean a challenge for ABBV to replace that revenue stream (Humera makes up 32% of all revenues, though it used to be 65% before Botox).

Large cap biotech. Humera generates $20B a year in revenue. Exceptional job at using that cashflow to diversify, as in buying Allergan. 15% EPS, clean balance sheet. Its value will eventually be realized. Yield is 5%. (Analysts’ price target is $121.05)

All big pharmas have been treading water. Patent legislation left them with a leaky boat. He's gravitated toward the bio-pharmas. His favourite in that space is AbbVie, as it's good on fundamentals and financials, inexpensive, very fine dividend, great cashflow generator.

Likes it. A spin-off of Abbott Labs. They have made a purchase of Allergan that diluted the concentration of Humira. The company will get its legs so buy it and be patient.

A sort of contrarian call. Humera is their primary drug (US$19.5 billion annually) used for various immunology disorders. Competitors will nip at their heels here, of course, given that success. They have this drug through 2023. As importantly, they bought Allergan, makers of botox, which is executing. Pays a .5.5% dividend and trades at 7x earnings. There's a disconnect between company value/performance and market perception. A great balance sheet to support the dividend. (Analysts’ price target is $110.26)

Owns Abbott Labs instead, as it's more diversified. ABBV is pure pharma. They need to broaden reliance on a few key drugs.

Dominance of Humira on revenues had given them pause. Since then, it acquired Allergan, which diluted the concentration of Humera. Metrics are wonderful. 12% free cash flow yield. Trades at less than 10x earnings. Great dividend. Lots of runway ahead. Elective surgeries will come back. Anticipate $12.50 EPS this year, and more next. Yield is 5.42%. (Analysts’ price target is $109.35)

ABBV vs. PFE Switch to Abbvie. The whole pharma business has trouble at a structural level. They spend millions developing drugs, then watch the clock wind down till the generics can compete. Abbvie gives you an exciting bio-pharma alternative. Problem in the past was its one-drug focus, but the Allergan purchase diluted this risk. About 10x earnings, not expensive, great cash flow, good dividend.