Bristol Myers Squibb (BMY)

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 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.

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

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.

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.

Credit them for being a company which led to the schizophrenia drug, which the FDA just approved. BMY has been unloved, selling before 8x PE at a 4% dividend. Puzzling, but shares will certainly rise. He sold it last year and may re-enter it.

Pays over a 5% dividend. Was the top pharma, but slipped. Their purchase of Celgene disappointed while revenue growth has been negative. Earnings shrunk last year. But he likes the new CEO and him buying 3 companies in onocology and neuroscience, both growth areas. Also, there have been cost cuts. Be patient though. They reported a clean top and bottom line beat last week and issued very strong guidance. Trades at a cheap 7x 2025 PE.

It just raised its forecast, released better numbers than expected and revealed a slew of new, promising drugs. Shares have jumped. The new CEO knocked out of the park the latest numbers, instead of missing numbers as so often before.

They just reported a Q2 beat. It hasn't performed well, but is finally rebounding a little. Their product pipeline will be good for the next few years.

His whole mantra is to buy good companies that are getting better. He wants to have a strong fundamental view, and he wants the market to show that it's agreeing with him -- he doesn't want to be alone in the woods in a good market, not participating.

Problem is a fair bit of debt, low growth. In a market like this, you only need 20 companies to get a broadly diversified portfolio. Don't need to take on the risk of this one. Avoid.

It will need a lot of time to turn around. It hit bottom when it touched a 5.75% dividend yield. You won't see good news here until 2029 or 2030.

Dow 7% in May. Lots of struggle in the healthcare space. Will sell.

The market lacks patience for them to get into AI, though he disagrees and the dividend is good.