Biotech Values

[DewDiligence]

Re: Stock picks

I'm looking for some ideas for the new year.

As you know, I’m bullish on RVNC and ENTA. RVNC will have strong buyout vig as soon as Daxi is approved for marketing. ENTA is cash-rich and has a decent chance to make a big score in RSV and/or HBV; the payoff could take a while, but there’s not much downside at the current valuation.

ABT, PFE, and BMY are solid defensive picks that offer “growth at a reasonable price” (a/k/a GARP).

ABT has already made serious money on COVID (#msg-159036972) and PFE stands to make a lot, but COVID business is just a sideshow for these companies. More important to PFE than COVID is the emerging market for second-generation pneumococcal vaccines, where I think PFE is favored to prevail against MRK (#msg-160021392).

BMY is simply cheap because many investors (wrongly, IMO) consider it a loser company.

My largest other holdings are CLF, MMM, and DE. None of these three is exactly cheap; however, CLF has turned into a rocketship for reasons you already know, while MMM and DE are simply great companies that will likely continue to be great companies for many years.

Good luck.