Matt Barasch Bristol Myers Squibb BMY-N HOLD Feb 19, 2004

BMY paid nearly $13 billion to buy the company that was developing Cobenfy. This could could help BMY get the patent cliffs of their other drugs in a few years.

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.

Pays a yield of 4.55% higher than a 10-year treasury note, earnings growth is outsized and is cheaper than the S&P aggregate (under 21x 2025 PE) at 7.6x. They're paying a big charge this year and so are taking a big earnings hit. They projects over 800% earnings growth in 2025. They can deliver on their long-term turnaround plan, but it will take time. But their cancer franchise fell behind Merck's, and $74 billion buy of Celgene wasn't worth it. Also, they face patent cliffs on some of their big drugs. But the new CEO has bought 3 companies, including 2 biotechs focused on cancer drugs. Shares are up 27% this year. They received approval for their key schizophrenia drug, among other approvals. They have enough quality drugs in the pipeline.

Recently bought on technicals. Pretty decent dividend. Sees growth coming back.

It often pops with a new drug but he doesn't like the sector. Pharma companies have not been good to invest in over the past year. He prefers companies with a medical devices component.

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.

Shares are down, but buy more. Their new schizophrenia drug is super, and the stock pays a 4% dividend. A great CEO.

It reports Thursday. Watch for news on Cobenfy, the new schizophrenia drug in 30 years, and potentially good. And with their yield, BMY is one of his favourites.

She bought it because the industry has underperformed many years; they're facing several drugs coming off patent, but are developing new drugs they will bring to market. Trades under 9x PE and pays a 4.6% dividend. This industry will benefit greatly from AI.