Opinions
Jim Cramer - Mad Money
Bristol Myers Squibb
BMY-N
BUY
Jan 11, 2021
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.
It was up nearly 4% today during JPMorgan's healthcare conference. BMY delivered good news. Management announced strong early revenue goals for new products, including three new drugs that could hit $4 billion in sales this decade. Their strong pipeline of drugs was bulked by buying Celgene and MyoKardia. They also announced a bullish free cash-flow forecasts for coming years which will buyback shares and pay down debt. For years, this has failed to break out from mid-$60s, but that could change.