Opinions
Robert Lauzon
Bristol Myers Squibb
BMY-N
PAST TOP PICK
Oct 31, 2017
Stock price when the opinion was issued
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Was a laggard in the space, which you don't want to chase in and of itself. Often you want to buy strength, best in breed. If you look at the dip in the chart right after he bought, it shows you the danger of going down the food chain in a sector that's doing quite well.
He's holding on and would buy today.
Stock has been hot since the summer when the new CEO took over, then they got approval for their schizophrenia drugs. (Abbvie's drug failed last month.) But BMY has fallen 9% in the past 4 weeks--maybe because of concerns over the group, not the stock. Trades at only 7.9x PE 2025, and pays a 4.4% dividend which just increased last week. The stock is dirt cheap.
It's turned around in the last 6 months under the new CEO, rallying 40%. In the face of expiring drug patents, they launched a revolutionary schizophrenia drug. He also likes the rest of their pipeline to treat cardiovascular disease and oncology. He bought shares late last year.
They have huge oncology franchise, but face a huge patent cliff. But they have a some promising drugs. He owns this partly for the 5.6% dividend. He took shares off the table when the stock spiked earlier this year, but at current levels, he's watching the price go lower before buying again.
(A Top Pick Feb 8/17. Up 20%.) Still his favourite Pharma name. Had a small one-cell lung cancer solution, and the market is starting to get its head around that they are still in the game. We should get results in the 1st half of 2018. Over the next 5-6 years, their pipeline of drugs is so vast and undervalued, that as drugs come through fruition into cash flow and get approval, there are more and more tailwinds. It could be a potential take out candidate.