Biotech Values

[DewDiligence]

The stocks I own and manage for others:

I’m bullish on ENTA (which is no secret, LOL); it’s my largest and second-most profitable position insofar as I bought a lot of shares at $17 and change in mid 2012 (#msg-89490439, #msg-89551728, #msg-91763126). The premise for owning ENTA is laid out in #msg-94993406.

On a trade-adjusted basis, MNTA is my most profitable position due to the bolus of shares I acquired on the cheap in Nov 2007 (#msg-24309693). I’ve gradually trimmed my position in the aftermath of the 2012 adverse Court ruling on the Hatch-Waxman Safe Harbor; however, I’m bullish on MNTA’s generic-Copaxone and FoB programs, and I still have a sizable holding.

I’ve owned a large position in MON (which I consider a biotech stock) for several years, and I bought a lot of ABT just prior to the ABBV separation in Dec 2012. MON and ABT are premiere plays on The Global Demographic Tailwind (‘TGDT’); I intend to own both for a long time.

I bought ZTS, the animal-pharma spinoff from PFE, in Jun 2012. So far, it hasn’t done much; however, I consider ZTS a bona fide beneficiary of TGDT insofar as rising global affluence will lead to increased meat consumption and pet ownership.

The institutional and family portfolios I manage own the above stocks and also PFE, MRK, BMY, AGN, and ZMH.

Turning to non-healthcare stocks, I like PCL, DE, HES, RDS-A/B, CLB, CLF, MDLZ, and MMM (among others).

PCL, a timber REIT, is the one stock I would own to preserve wealth if I were allowed to own only one stock. I’ve posted about PCL on this board and on #board-15427, so I won’t repeat the bull case here except to say that timberlands are sui generis as a store of value and a growth vehicle as the world requires ever more wood for conventional (e.g. housing) and unconventional (e.g. energy biomass) applications.

DE is perhaps the best company in the S&P 500 that trades at such a low P/E ratio. It’s not as cyclical as most investors think (85% of sales come from agriculture equipment) and, like MON, it’s a strong beneficiary of TGDT.

HES, RDS-A/B, and CLB are energy companies. Each is appealing for a different reason, but that’s too much detail to get into here. (See #board-15427 if interested.)

CLF is an iron-mining company that was one of the worst performers in the S&P 500 during 2012-2013; however, I recently added shares because I think it’s turning the corner and has considerable buyout vig.

MDLZ is the snacks-and beverages spinoff from Kraft. It derives almost all of its sales from outside the US and a whopping 45% from emerging markets.

MMM is simply a great company that is incorrectly viewed as a conglomerate by some investors. Actually, MMM is a materials science technology company with highly diverse product lines. It’s strongly focused on emerging markets and is a solid beneficiary of TGDT.