Stockchase Opinions

The Panic-Proof Portfolio (Stockchase Research) Viatris VTRS-Q TOP PICK Feb 08, 2024

Stockchase Research Editor: Michael O'Reilly

We reiterate VTRS, producer of Lipitor as one of its brands, as a TOP PICK.  Management has simplified its product offering portfolio and committed to returning half of free cash cash flow to shareholders through aggressive share buybacks.  It trades at 8x earnings and below book value.  Cash reserves are growing as debt is aggressively retired.  Its dividend is backed by a payout ratio under one-third of cash flow.  We recommend trailing up the stop (from $8.50) to $10.50, looking to achieve $14 -- upside potential of 19%.  Yield 4.0%  

(Analysts’ price target is $14.13)
$11.465

Stock price when the opinion was issued

Pharma & Healthcare
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BUY

Share price flat, but owns shares.
Excellent business within healthcare sector.
Getting into new business lines.
4% dividend yield with lots of free cash flow.
Share buybacks good for shareholders.
Trading at 4x earnings.

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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK
Stockchase Research Editor: Michael O'Reilly

The pharma company produces Lipitor as one of its brands.  It has embarked on a divestiture strategy that is allowing it to focus on core competencies and reduce costs.  The are on target for $450 million in new product launches.  It trades at 7x earnings and below book value.  Cash reserves are growing as debt is aggressively retired.  Its dividend is backed by a payout ratio under one-third of cash flow.  We recommend placing a stop-loss at $8.50, looking to achieve $41 -- upside potential of 30%.  Yield 4.5%      

(Analysts’ price target is $14.11)
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This is a Panic-proof Portfolio opinion which is available only for Premium members

Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK
(A Top Pick Feb 08/24, Up 8.6%)Stockchase Research Editor: Michael O’Reilly

Our PAST TOP PICK with VTRS is progressing well.  To remain disciplined, we recommend trailing up the stop (from $10.50) to $11.50 at this time.

premium

This is a Panic-proof Portfolio opinion which is available only for Premium members

Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK
(A Top Pick Feb 28/24, Up 0%)Stockchase Research Editor: Michael O'Reilly

Our PAST TOP PICK with VTRS has triggered its stop at $11.50.  To remain disciplined we recommend covering the position at this time.  Along with previous recommendations, this will result in a net investment gain of 4%.  

HOLD

Stock's done nothing for him except pay a 4% dividend. A couple of more asset sales to go next quarter. He'd love it if they took the cash, paid down debt, and bought back shares. But management keeps making acquisitions, riskier. Trades at 3-4x earnings.

HOLD
Down 19%.

Great free cashflow, more than covers the 4% yield. Cheap PE at 4x earnings. Q2 results coming out in early August, where a couple of divestitures will be announced. Awaiting stock buyback. Paying down debt, making acquisitions. $12B market cap, but not well followed.

BUY

It is a pharma company trading at 5X earnings. It is buying back stock, as much as 5% and has a slew of new products.

STRONG BUY

Has owned it a few years and it's only starting to perform recently after earnings and a share buyback announcement. Very cheap at 5x PE. Stable revenues and lots of free cash flow, and pays a 4% dividend. He targets $20.

HOLD

Proof that not every stock he buys goes up ;)  He's held for years. Recent earnings were weak, and stock fell ~15%. Generating significant free cashflow, which now will be used to buy back shares incredibly cheaply. It's the best use of capital at this time. FDA investigation in one of their plants, costing about $300-400M in EBITDA. Yield is 4+%.