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Abbott Laboratories Message Board

chickenguy_nc 47 posts  |  Last Activity: Mar 23, 2015 4:05 PM Member since: Oct 5, 1999
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  • chickenguy_nc by chickenguy_nc Mar 23, 2015 4:05 PM Flag

    There are a couple of Recent News articles about RF, both positive, I think, but I'm not sure they will do anything to boost share price. One points out that RF is undervalued, based on its low price/book value. The other points out that RF has the sector's lowest return on equity, which doesn't seem like a positive, but turns out that the low value is due to a build up of equity with little increase in earnings. Not sure, but I think that there is a common denominator used for those two calculations, maybe not identical, but almost: Book value in P/B and equity value in ROE. Could mean further dividend increases, further share buyback, or acquisitions to drive up earnings. But because this is all hypothetical, buyers apparently aren't turned on to RF by increased equity/book values leading to decreased P/B and ROE. Guess we'll have to wait to see how management converts those increased values to return for shareholders.

  • Reply to

    Forward P/E versus Trailing P/E

    by chickenguy_nc Mar 19, 2015 10:39 AM
    chickenguy_nc chickenguy_nc Mar 20, 2015 8:06 PM Flag

    You're right, I really was that thick. I thought the breakup fee would be paid out of cash, didn't realize it would count against earnings. Thanks for setting me straight.

  • Reply to

    Forward P/E versus Trailing P/E

    by chickenguy_nc Mar 19, 2015 10:39 AM
    chickenguy_nc chickenguy_nc Mar 20, 2015 10:59 AM Flag

    Imbruvica SALES for 2015 are estimated to be only $1 billion, which is only about $1 per share. Of the Imbruvica revenues, JNJ gets HALF, from pre-existing partnership agreement. And ABBV earnings as % of revenue is only 8.9%, which brings the earnings/share of Imbruvica down to about a nickel. Period.

  • Reply to

    Forward P/E versus Trailing P/E

    by chickenguy_nc Mar 19, 2015 10:39 AM
    chickenguy_nc chickenguy_nc Mar 20, 2015 10:57 AM Flag

    S&P has about the same forward P/E estimate. They're forecasting 2015 earnings of $4.36, almost 4X 2014 earnings. And it's not clear where that increase in earnings is coming from. I don't think Yahoo generates its own numbers, they get them from analysts - and, yes, those analysts do make mistakes. My question is whether ABBV earnings are really going to increase by so much YOY and, if so, how?

  • chickenguy_nc by chickenguy_nc Mar 19, 2015 10:36 AM Flag

    Thought it would be a $10 stock, looks like it's going to be a $9.50 stock. Or a $9 stock. Even at that price, the P/E and dividend yield don't make it a strong buy. It's all about fundamentals, and the most basic share price driver is earnings. We'll sit in the $9-$9.50 range until earnings start increasing by 10-15% per year.

  • Reply to

    Split? Don't think so, hope not

    by chickenguy_nc Mar 17, 2015 2:15 PM
    chickenguy_nc chickenguy_nc Mar 18, 2015 10:23 PM Flag

    Good observation. Where do you find that information?

  • Reply to

    Split? Don't think so, hope not

    by chickenguy_nc Mar 17, 2015 2:15 PM
    chickenguy_nc chickenguy_nc Mar 17, 2015 4:32 PM Flag

    Rather than the absolute amount of debt, you should look at long term debt-to-capitalization ratios. That gives you an indication of how much leverage a company is using to finance operations and, therefore, how much it is at risk. When JNJ is compared LTD-to-Cap against its peers, such as Pfizer and Roche, its debt level is relatively low, which I take to mean that the debt load is manageable. Because JNJ profit margins are high, they make more money from the debt than the cost of the debt. As for lower cap companies seeing share price increases, you may be comparing apples to oranges. JNJ is a huge, super-mature company, and not, therefore, considered as a growth stock. It will grow, but not rapidly. And finally, the market determines share price in the most simple of ways. It brings together those who wish to sell share and those who wish to buy shares, and it lets them agree on price. In general, the share price reflects anticipated 12-month returns, through price increase or dividends, factored by the risk involved in holding the shares. And to return to the original topic, I hope JNJ will not split anytime soon.

  • chickenguy_nc by chickenguy_nc Mar 17, 2015 2:15 PM Flag

    Despite staying around the $100 for most of the last 12 months, the current trend is downward, and like the rest of the market, JNJ price is volatile. I hope management has the good sense to put off any consideration of a split for another 12 months, at least. This just doesn't look like a stock in need of a split. If management does decide to split, I hope it will only be a 3-2, not a 2-1, to ensure the price has a chance of staying above $50.

  • chickenguy_nc chickenguy_nc Mar 12, 2015 2:14 PM Flag

    I think the price increase reflects the share buy-back number, which is on the high side. And the price increase is really modest, simply taking RF back to where it was just a week ago, and where it's been many times in past months. It's all about earnings, and until they increase, the price remains range-bound around $10. The P/E is in line with peers. P will increase after E increases.

  • The as-expected 1-cent/quarter increase in dividend keeps RF in line with the other major regional banks, raising the yield to around 2.5%. That's about all that can be expected in current economy. The buyback amounts to about 7% of market cap, but the effect of that on share price depends on what they do with the shares they buy back. Taken together, could move the price back to the $10 range. S&P has a 12-month price prediction of $11. I think that's optimistic, unless earnings beat expectations.

  • chickenguy_nc by chickenguy_nc Mar 10, 2015 9:48 AM Flag

    In the news links, there's an article about what every investor should know about RF, from Market Realist. It's so positive overall that I wonder if it's written by the RF publicity department. If it's all correct, and if there's no negative information omitted, investors should be moving this way. So where's the disconnect? Any thoughts?

  • Test results for RF were about average, not bad, not great, about a B+. But even that was swamped by the news that job growth continues, interpreted as meaning that the Fed will raise interest rates sooner not later. I'll be surprised if these results translate into more than a 1-cent increase in quarterly dividend. That is, after all, a 20% increase, and I don't think more than that can be justified.

  • chickenguy_nc chickenguy_nc Feb 25, 2015 9:59 AM Flag

    Great call, thanks for the heads-up, so glad I sold off my RY position based on your accurate forecast. It's because of posters like you that I make all my buy-sell decisions based on advice from the message boards.

  • Reply to

    Market's a Puzzle

    by chickenguy_nc Feb 24, 2015 11:24 AM
    chickenguy_nc chickenguy_nc Feb 24, 2015 10:39 PM Flag

    I like O, used to have it. It's also a triple net lease operation, like WPC, and it has the nice feature of paying its dividend monthly, which is a plus if you're reinvesting the dividends. Hadn't heard of ARR, surprised that it qualifies as an REIT. It doesn't own real estate, just debt instruments for real estate. Didn't know that was possible. Always something to learn.

  • chickenguy_nc by chickenguy_nc Feb 24, 2015 11:24 AM Flag

    I've been building a position in WPC, for income. It's an international REIT, using the triple-net model. Here's what was reported for it today: "W.P. Carey beats by $0.19, beats on revs; guides FY15 FFO above consensus (WPC) : Reports Q4 (Dec) funds from operations of $1.19 per share, excluding non-recurring items, $0.19 better than the Capital IQ Consensus Estimate of $1.00; revenues rose 18.7% year/year to $207.7 mln vs the $166.63 mln consensus. Co issues upside guidance for FY15, sees FFO of $4.76-5.02 vs. $4.08 Capital IQ Consensus Estimate." And today the share price, in an up-market, is down 1.85% Not complaining, I'm a buyer on dips, but just have no idea how to understand the response.

  • Reply to

    I Think a 2/1 pr 3/1 split is in order

    by taffy123414 Feb 24, 2015 8:00 AM
    chickenguy_nc chickenguy_nc Feb 24, 2015 9:08 AM Flag

    I assume you're joking. After a split, everything is recalculated and expressed in terms of the post-split price. If it's at a multi-year high before the split, the price after the split will still be the multi-year high - relative to the recalculated pre-split prices back to the beginning of time.

  • Reply to

    It appears that PFE is a 4th reich front.

    by cna_corrupt Feb 22, 2015 3:38 PM
    chickenguy_nc chickenguy_nc Feb 22, 2015 6:37 PM Flag

    "In terms of neo-Nazism, the Fourth Reich is envisioned as featuring Aryan supremacy, anti-Semitism, Lebensraum, aggressive militarism and totalitarianism. Upon the establishment of the Fourth Reich, German neo-Nazis propose that Germany should acquire nuclear weapons and use the threat of their use to re-expand to Germany's former boundaries as of 1937." That what you're referring to?

  • Reply to

    "Such A Deal"

    by didoo36 Feb 10, 2015 9:26 AM
    chickenguy_nc chickenguy_nc Feb 20, 2015 5:20 PM Flag

    Not clear from your post, but it doesn't sound like ABT is going to force you to sell your shares to them. Can you just decline the offer? If not, why don't you go ahead and sell the shares yourself? Or buy enough shares to bring your holding up to 100 shares? And if your broker doesn't want to deal with lots smaller than 100 shares, change brokers. That hasn't been a problem since computers were invented and paper stock certificates disappeared. I'm a very senior citizen with an account at Fidelity. A buy/sell for 10 shares is handled just as quickly as one for 100 or 1000.

  • Reply to

    Dividend

    by joco9799 Feb 12, 2015 2:56 PM
    chickenguy_nc chickenguy_nc Feb 19, 2015 9:09 AM Flag

    Let's see if it happens again. Here's the link you posted: http://www.federalreserve.gov/newsevents/press/bcreg/ccar_20140326.pdf If this one's removed also, has to be because Yahoo prohibits posting links.

  • Reply to

    Dividend

    by joco9799 Feb 12, 2015 2:56 PM
    chickenguy_nc chickenguy_nc Feb 18, 2015 10:37 PM Flag

    Thanks gillie, I think you're right about requiring approval.

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