While I have marked what I believe are my very best ideas, and as a result current real holdings, with the good old "Top Pick" mark I like to keep the pedal to the medal here in CAPS, throwing as much stuff at the wall as possible in my search for real-world investment ideas. Once again I am approaching the 200 pick limit, all with at least some sort of pitch I might add :). [more]
In the past I was a very black or white individual. Either you were with me or against me. I either loved something or hated it. As I have aged, I have realized that the world consists of different shades of gray or perhaps even different colors, rather than just being black and white. No longer seeing everything in extremes is a wiser, not to mention healthier, way to live. [more]
Let me begin by saying that I am very far from being a fan of Big Pharma. I think that as a whole our society is waaaaay over medicated. A lot of the conditions that people take medication for could be treated nearly as effectively through things that require more effort than just taking a pill, such as exercise, changing one's diet, meditation, and preventative medicine. I think that this over-medication is partially a result of the massive influence that Big Pharma has and even more a product of our broken healthcare system where many doctors are under-compensated by the current medical system, have becmoe jaded and would rather turn their offices into giant factories pushing pills and patients out the door rather than taking the time to work with them.
Whew, now that I have that off of my chest, I have to admit that many people do need and have been significantly helped by medication from time to time, myself included. It's not like I'm some sort of medicine man or Scientologist who shuns modern technology and won't let you take his picture. That's the main reason why the company that I am about to talk about passes my new found investing ethics test (barely) when companies like tobacco do not. There's at lease some people who benefit from pharma, while the same cannot exactly be said for tobacco...other than the people who sell it of course.
Anyhow, onto the company...one which I currently have a long position in - Pfizer (PFE). I bought a position in it a while ago in anticipation of it spinning off either its animal health or infant nutrition divisions. It looks like the former is going to happen and the latter will be sold off. Here's a link to an interesting article on the company:
Why Do Hedge Funds Love Pfizer?
Despite the recent increase in share price, Pfizer’s valuation still remains among the lowest in the large cap pharma space (Bristol-Myers Squibb, Eli Lilly, Merck, Abbott, J&J) at 9.5x 2012E earnings versus a comparable universe mean of 12.6x.
With a promising pipeline of drugs targeting attractive markets, restructuring plans that will serve to unlock value, a rising dividend, and an undervalued stock price relative to its peers, Pfizer has solid post-patent cliff profile that will drive outperformance in 2012. Any positive data for its pipeline drugs should drive the stock price upwards. Strong fundamentals seem to have been identified by a number of insiders and fund managers as well including Ken Fisher and Bill Miller...
I came across a neat article in last week's Barrons that I thought everyone here might find interesting. I couldn't talk about it earlier because I actually purchased one of the stocks listed in it for my real-world portfolio. I bought the Strategic Hotels & Resorts Preferred C shares. They provide an 8.25% yield at face value, which is $25/share. The company hasn't paid dividends since the economic implosion, but it appears ready to resume payments in June. At that time it will pay $7.22/share in back dividends. After backing that out, you're looking at a yield of slightly over 9% going forward. This is the sort of odd investment that I love.
"STRATEGIC HOTELS & RESORTS is a real-estate investment trust that owns and manages luxury hotels like the Four Seasons in Jackson Hole, Wyo., the Ritz-Carlton in Half Moon Bay, Calif., and the Fairmont Hotel in Chicago, among others. After the financial crisis of 2008, Strategic stopped paying dividends on its common and preferred shares, but Litespeed stepped in to scoop up the preferred about two years ago. They now trade at $29, up from $18.50 when the fund started buying.
"The properties are fantastic, and are recovering occupancy rates, although they're not back to the peak in 2007 yet," she says.
This summer the company will pay hefty back dividends owed on the shares, Zimmerman adds. Unpaid dividends payable on June 29, 2012, will be $7.22 per share, which works out to about an 8% return for the firm. If the preferreds trade at par once dividends are reinstated, the shares will be worth $32.22, Zimmerman estimates."
Happy Days in Distress [more]