GlaxoSmithKline PLC (GSK)

He has this in his high yield portfolio. GSK-N has their well established pharma and then their Nicolette and other consumer lines. They are getting rid of non-core assets. There is not a lot of growth, but a modest dividend.

This has had some serious misfortunes. The balance sheet is very stretched. It may be forced in making an acquisition of a Novartis (NVS-N) business which it is contractually required to do. The pipeline is fairly weak. Thinks it will eventually survive, but there is a possibility of a dividend cut. There are better places to be. It might be better to look at this a year from now.

A great company. Most of these pharmas are pretty safe. He thinks it is a pretty good buy right here.

(A Top Pick March 21/17. Up 4%.) He has been beating the drums for international investments because dividends were greater and valuations were better. Also, US healthcare has been so under pressure with prices skyrocketing, and this gave you an opportunity to invest in the European drug company.

Healthcare is being overshadowed by a whole bunch of things, demographics, government policies, etc. He is fairly constructive on healthcare. One of the few spaces that is not trading at an overvalued market multiple. One of the overhangs is the political cloud, but if you can get past that, it is a positive space to be in, and not expensive.

He is waiting for some data from the FDA on their inhaler, and perhaps it will come out overnight tonight. This is a diversified pharmaceutical. He likes their long-life assets. Only a couple of their drugs are less than 3% in revenues. This has a decent yield with the new CEO in March committed to that yield.

He is looking for market-leading companies that are in sectors out of favour, and either have very strong dividends or some sort of catalyst that will unlock value. With markets just off all-time highs, he is looking for defensive plays, not one trick biotech ponies, but ones that have a whole array of meds. This is one of the leaders in therapeutic vaccines, various compounds and strong research development. Also, it has the European tarnish and lower valuation, but their business is outside of that area with about 50% in emerging markets and 25% in North America. A dividend well north of 4%. (Analysts’ price target is $48.)

He likes this and their diversified business line. They’ve got vaccines, pharmaceuticals and their consumer health. Their pipeline tends to be a little bit earlier. Advair does end up as a generic this year, and have fully indicated that in their guidance. The upside could be if we don’t see that generic hit the market this year. There have been some delays in other generic hitting the market. That would be pure upside. Good yield.

Not one he has owned. Novartis (NVS-N) would be his preferred pick, which has some really good momentum going. They have a new drug Entresto for heart attack victims. Healthcare has been beaten up, and could be the surprise sector for 2017.

A really consistent company. Trump getting into the White House is actually a good thing for a lot of these drug companies. He likes the company. Dividend yield of 5.3%.

He likes this. It has held up well compared to how some of its US Pharma or biotech peers have done this year. The recent pullback raises the question of is it a buying opportunity or will there be more. All of the space has some question marks around it, with what is going on in the US election. The cautious way to play is to buy either a 3^rd or a half position, and let the next few week’s ride. Yield of around 5%.

When Brexit occurred it was one of the few that went up. It is a global franchise. They had their issues in the past. It is hard to replicate that blockbuster drug. They should be a beneficiary to the movement away from generic drugs.

The US$ is strong and most of their business is done on the US side. When they bring the money back over to England, they end up getting a favourable exchange. This has some pipeline issues, and has to come up with some new drugs. It will probably be a beneficiary of BREXIT soon to come, as well as the US$.

Glaxo Smith (GSK-N) or BMW (BMW-GR)? Two entirely different companies. A global drug company and an automobile company. This is going to be more of a somewhat stable profit and dividend payer. The drug companies all have phenomenal cash flows. To him, there are better places to look for value.

Has a deep pipeline of drugs. 25% of their business is in consumer. Trading at around 15X forward earnings. Not a lot of growth, but they have a really attractive yield of 5+ percent which he feels is safe.