Not many bargains left at these S&P 500 levels, Wall Street will be moving into beaten up names like SNY that offer value, dividend, and future capital gains.
1. Competition in the diabetes space is way overblown. Lantus is a daily Basal insulin used by Type II diabetes patients. Humalog and Novalog are mealtime only insulins used by Type I diabetes patients. Huge difference. There are 10 times more Type II diabetes patients and Lantus controls 80% of that market.
2. One must keep in mind as the world grows in population, becomes fatter, older, more sedentary, those developing Type II diabetes, in need of medication, will spike.
3. SNY is on the right side of the currency war. The Euro will continue to fall in the coming years as the Greenback rises, this will be a big plus for SNY products and income.
4. SNY Board realizes it is under extreme pressure and scrutiny to hire a credible CEO who will continue down the path of reform and innovation. The day SNY announces the CEO, which is a certainty, a guarantee rise in share price.
5. SNY currently trading 1.9 book, the lowest of the large pharmas, possesses a 4.3% yield, and a 12.4 foward PE (S&P 500 avg PE 17). The pipeline is strong and the patent cliff muted unlike many other large pharmas.
6. Safety and yield plays are the place to be in this uncertain world, hence the reason the utility index is breaching new highs today. It is a logical conclusion pharmas will follow suit in the coming months offering solid yields and higher returns than utilities, especially a beaten down stock in the space such as SNY.
Normally it is the Joe Six Pack investor who is the last to know, in this case many large institutions, hedge funds, were caught by surprise. They will punish SNY severely for not letting the analyst community know beforehand. They now view SNY as a rogue outfit and will bring them back in line with devastating stock manipulation, sell programs. Then when they are done with their #$%$ kicking, have made their message clear to the Board, they will scoop up the shares incredibly cheap. They have the money and the power to manipulate a stock. The game is rigged. This vindictive nonsense represents a truly remarkable buying opportunity. Keep your eye on the fundamentals.
Truly quite astonishing. This is not a small start-up tech firm but one of the largest pharmas in the world.
Thanks in advance.
Just too good to pass by for a patient investor.
NC, your logic does not make sense. An admission of failure would be if PFE MGT makes another overpriced acquisition as it has done repeatedly in the past. Now that would be a confession that MGT has no faith in their internal R&D, that their large pipeline of drugs and future strategy is severely lacking. I have made this point repeatedly but I will make it again, PFE has spent over $200 billion in acquisitions the past decade alone, yet PFE's market cap today is only $181 billion, not a good investment. Repeated acquisitions only diverts PFE from it's real problem, having accountability, leadership and a culture of success in their critical R&D. This in the long run will ultimately determine PFE's fate, not another costly acquisition. Now you might think an additional $1.50 in stock price is not a big deal (Just playing along with your number) but add that to a 3.7% dividend and you have a return of nearly 9%, and this is before the added value of a potential breakup of the company, in my book that is a winning hand. PFE is already too big to manage, and they have proven time and time again large purchases of other Pharma piplelines is not good business. Here is a novel idea, why doesn't PFE's R&D produce a fantastic pipeline and have another company buy us out at an overinflated price?
PFE has made over $200 billion in acquisitions the past 10 years and yet the market cap today is only $181 billion. The last thing PFE needs to do is make another overpriced purchase, instead focus on in house R&D, develop a pipeline from within. I realize this is a tall order considering how pathetic PFE's R&D has been in the past, but that must change, led by MGT demanding accountability and developing a culture of success. With that said PFE does have quite a few drugs with large potential in phase 2 and 3 development. I wouldn't mind smaller acquisitions that augments present strategy. I foresee PFE breaking the company up in the near future which should add value.
These govt agencies predictions are notorious for being wrong. As an investor one must have the foresight to find fault in the logic of the prevailing thought which in the case of coal is quite easy to do. I repeat, the world can no longer afford to subsidize coal, the costs are too great. This is what is not factor into the future of coal.
The burning of coal worldwide accounts for 45% on the energy related CO2 emissions, moreover the burning of coal emits air pollutants such as sulfur dioxide, mercury, nitrogen oxide and other heavy metals. CO2 levels in the atmosphere have risen from 295 ppm to 400 ppm in the past 75 years alone, which is directly related to the unprecedented burning of fossil fuels, especially coal. The spike in CO2 and other global warming gasses is truly alarming, increasing at a rate not seen in the past 10 million years.
The United States fiscal deficit has recently fallen to less than 3% of GDP, not bad from a historical perspective, a number Richard Cheney would gloat about if he was still in office.
China is a state run economy, over 90% of their industries still controlled by the govt, many of those highly subsidized and money losing. Thanks to endless infrastructure spending to prop up their failing economy, China's debt to GDP now stands at over 200% clearly unsustainable.
There is absolutely no comparison between the health of the U.S. economy and the fraud known as China.
And as far as the projections you allude to from the various govt agencies they do not take into the account my point which is those numbers do not take into account the many costs inflicted by the coal industry upon our society in the form of pollution, health expenses, global warming, et cetera. I foresee that changing, and that will be the impetus to drastically reduce the burning of coal for energy needs in the future.
It is the future of coal where I disagree with dstone and I made my reasoning quite clear.
If the republican party is supporting an industry that poisons our children, is the largest contributor to man-made global warming, simply because coal manufacturers contribute heavily to their campaign coffers then the GOP is indeed corrupt, placing the profits of coal before the health and welfare of our citizens.
The burning of coal is the leading cause of smog, air pollution, acid rain, emits a list of endless deadly particulates including mercury, nitrogen oxide, sulfur dioxide, contributes heavily to the degradation of our water via coal ash deposits, mining runoffs, and is the leading contributor to man-made global warming. Anyone who denies those facts is the one who loses all credibility.
Sadly you are correct, but that does not change the reality the harm the burning of coal does to our health, environment, it's large role in global warming. For this reason I foresee the projections for coal consumption to be vastly overstated and this will severely impact BTU which has leveraged it's operations based on the belief the demand for coal will continue to increase on a 3% pace.
Coal has been subsidized for too long, not taking into account the many costs including global warming, health problems, water degradation, air pollution, et cetera. This has to change.
Also a bet on coal is a bet on China, which is obviously a ponzi scheme built on debt, a central govt supporting nonprofitable industries and endless infrastructure spending. If China falters, which is only a matter of time, BTU is hit hard.
I felt compelled to introduce a strong dose of reality to a BTU message board which has been inundated with incredibly pollyannaish assessments of BTU's future. Hopefully the vast majority have viewed these posts as simply a form of comic relief and have not employed any of these inane rants to somehow justify an investment in BTU. If you have, my condolences for your incredibly large losses the past 24 months.
One must comprehend even though BTU stock chart has the appearance of a steep triple black diamond ski slope it is certainly possible and in my opinion quite plausible BTU falls below $7 a share, a level BTU languished from 2000 to 2004. Imperial Capital recently lowered their BTU price target to $5 a share citing high debt levels, leverage, and falling commodity prices in the space.
A rising dollar is not good for commodities and the stronger greenback trend is firmly in place as the currency war ramps up. BTU is also severely negatively impacted by the slowdown in China, one of their largest customers. China has done a lot of saber rattling to impose tariffs on imported coal to encourage and protect the development of their own large coal reserves which does not bode well for BTU's large Australian operations.
But by far the largest drag on BTU's future is the fact the world can no longer afford to burn dirty coal as a source of energy. The high costs from a pollution standpoint, health, global warming are simply no longer acceptable and the economies of the world will continue to respond with cleaner alternatives.
Any shallow dead cat bounce should be viewed as a selling opportunity. The downward trend for BTU remains firmly in place. I realize many on this message board are convinced that the corrupt republican party will be BTU's savior and that the GOP will extend the poisoning of our citizens via coal's many deadly particulates, ash deposits, global warming gasses but that evil mindset is misguided, America has had enough!
The reason to view large pharma as a safe haven is the fact the number of individuals suffering medical maladies, in need of medicine, is not effected by economic downturns. And your theory that PFE is in desperate need of a major acquisition ignores the reality PFE has a large number of potential huge money makers in Phase 3 and 2 development including the potential blockbuster Palbociclib which recently earned fast track status. Apparently Goldman Sachs did not get your memo, their 12 month target is $35 regardless if PFE makes an acquisition, convinced PFE MGT will soon break up the company to realize PFE's full price potential. Jeffries price target is $37.
One would think with PFE yielding 3.7%, in a relatively recession proof industry, and the 30 year treasury currently well below 3%, PFE would be holding up a bit better in this brutal sell-off.
As I pointed out with stunning accuracy the temporary strong snap back rally on Oct 4 was a joke and one should short the S&P 500. You made a great deal of money if you had done so. My call now is to go long NE but continue to short the S&P 500. NE's stock price already reflects the majority of bad news yet to come while the S&P 500 has a ways to go to the downside.