Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
I bought a medium sized holding of ASHDX due to its relative low volatility in the current environment. It's NTF at Fidelity. I'm contemplating purchasing USMV if the market decides to take a swoon.
Towards the end of April I added to Apple, Gilead and POAGX In a lateral move I sold CNP and bought SO. Better dividend yield and better dividend growth prospects.
In the near term I have chosen to become less active in my portfolio and on the board through the summer as I feel the market will be making a pullback sometime soon … perhaps, ten percent, or more. Note: I have recently felt this way before ... and, well, it just did not happen as I thought except for this past September and October.
My current asset allocation of about 20% cash, 20% income, 50% equity and 10% other leaves me heavy in cash and light in income from my normal allocation ranges. In addition, I am neutral in equity at 50% with a low range of 40% and a high range of 60%. Since, I feel the markets are way overbought, at this time, I am not doing much except watching. I'll become more active when I feel it's time to open a new equity spiff position.
I think it is interesting that Bank of America has come forward and expects a decline in the markets and recommends investors increase their cash allocation and even perhaps buy some gold. You can read more about this in the link below.
Why does the girl have what looks like a ketchup bottle buried in the sand?
Anyways, in terms of a scarier Summer, I don't know. You have a market that has been so distorted by economic policy that I continue to focus on needs. People need medicines from GILD and CELG and other such companies. People need sanitation and hygiene from ECL. I'm not going to sit here and time things.
I've always had a "needs over wants" philosophy and have only leaned more in that direction lately.
Edited to add: ended up adding to GILD and CNI. Wasn't going to add to GILD anymore but I just still find it quite appealing at this level. As for CNI, the rails are oversold. May also add to CELG.
"Why does the girl have what looks like a ketchup bottle buried in the sand?"
@scott: Looks as if she's constructing a pretty neat large sea creature eating someone. I suspect the ketchup may be for the finishing touch. Pic must have been posed- note the pristine condition of the clothing of the person being "eaten".
Notice from review of my asset allocation I have not sold out of the markets but I have adjusted it for the summer where stocks have a history, more times than not, of going soft. Still with fifty percent invested in equities with an allocation range of 40% to 60% ... I think you'll agree that I do have equity representation, perhaps more than warranted. I do feel, at this time, thirty percent in cash would be too much so I am not entering summer at thirty percent but might get there before fall arrives.
I think every investor has their own style and strategies and there are many more than one avenue one can follow to be a successful investor. I use a mixed style of actively engaging the markets along with core investments that are invested for the long run. I wish you much success ... however, I going to take a break form the markets at this time as I feel they are too richly valued for my taste to actively engage them. Most likely, I'll be doing some more selling before I do much buying.
Being an active investor, that I am, I have to stay in tune with the markets and position my spiff buys where I am finding opportunity. Currently, I am finding little opportunity and with this and the coming of summer it is a most welcome time for me to take a break.
I wish all a good summer ... and, I sincerely wish everyone the very best regardless of which investment avenue you choose to follow. Mine, for sure, is not for everyone for it requires me to monitor the markets often in order to position special investment spiffs with ever chaning market movement. I closed out my last open equity spiff back in April. And, I don't think my cash will go stale while I go play and enjoy the summer.
Should the S&P 500 Index pull back to around say 2,000 ... Then I'll open shop and most likely will trim my equity allocation by another five percent. If the Index should pull furter back to say around 1,900, then I'll trim again. Should it reach 1,800 then I start to perk up become more active; and, perhaps, engage it again with some spiff buys.
Agree with a lot of what Skeet says. I think it's an uncertain - potentially dangerous market. Face the truth. Cash yields a half percent or less. Short-term bonds little more. Reaching for double-digit returns in some of the riskier markets is unwise, IMHO.
No recent changes. Been at 18% cash & short-bond for a long while - reflecting my own lack of conviction one way or the other. Normal hold (cash) ranges from about 10% - 25%.
Nice shot of girl at beach. One thing I've learned at the beach is not to gawk at folks or be bemused by odd behavior there. Pretty much anything goes - as long as you don't get arrested
From my point of view, there is always something being undervalued or unappreciated in the market making it worth my consideration as an investment. Since my cash and I are partners one of us has to work. Since I've done my share of work, cash is not getting off easy by sitting around in some account earning less than a 1% return. One year's worth of living expenses sure, but the rest of it is out there humping it.
I'd say that 125-130 is a reasonable fair value, although I have seen higher numbers, including S & P Capital IQ, which has a target of $143 and a fair value of $160. M* has a fair value of $115 and a "consider sell" at $153.
I have seen a number of people make a case for much higher numbers for GILD. Personally - and things may change - if it runs up fairly quickly to the $125-130 level, I'll look to take some profits, but keep the rest. If it moves up to $125-130 over a somewhat longer period, then I'll have to make a decision at that point based upon what has transpired over that time. Gilead has been a frustrating stock, but I think that ultimately the dividend and the valuation has made it - at least personally - an easier sit.
I've been quite impressed with Gilead - as someone who found themselves in it when it got obliterated with the Express Scripts/Abbvie announcement, I added and then was impressed at how quickly management handled the situation.
As I always note, there are certainly risks (it's biopharma, something could happen and it could be up or down 5% or more in a heartbeat), but I think Gilead does have excellent management - there are worries about a company that is largely reliant upon HIV and particularly HepC treatments. The market I think is quite concerned that Gilead is not going to be able to replicate their success and that there will be pressure on prices. At what point is a lot of that risk priced in? Some discussion that GILD may be on to a functional cure for HIV. There's a lot in the pipeline that is not priced in. I find NASH and their focus on that to be really interesting and have a lot of potential. Gilead does not have a lot of employees - 7500 or so. MRK has about the same market cap and 70,000 employees.
Robin Washington - Chief Financial Officer "Yeah. It’s a good point. I mean, first of all, I’d say that we have a very highly, what we call it, as operationally leveraged model. So while we only have 7500 employees, we leveraged CMOs for manufacturing and we leveraged CROs and outsourced a lot of our clinical development activity. So our true population of employees that work on getting Gilead products to market is a lot larger. It’s just done in a very different way. And I think that’s given us a lot of flexibility over the years.
I think what you’ve heard executive management talk about relative to the culture and how we do things, I think has to do with again what’s been core to our success and the focus on science. And I think we’ve got at a very top of our organization, very senior scientists that are very closed to the data and close to what we do in the labs and the clinics. And that’s something that we want to retain, where we see us being able to add value to an acquisition is in earlier stage areas where we can influence the development path.
Obviously, GILD is not as cheap as it was when it was hit with the ESRX/ABBV situation and it fell into the $80's or when it was around $100 a week or so ago, but in terms of putting money to work, I still saw GILD appealing earlier today.
I also own CELG, which I think is interesting for different reasons, but does not share the same cheap valuation.
Overall, I've become more and more interested - both on an investment level and personally, from simply wanting to learn more - in healthcare. Gilead and Celgene - at some level - will likely be long-term holdings. I may explore other options.
Again, the other thing for me is that I feel more comfortable investing in "needs" over "wants" and healthcare certainly plays into that rule.
@Scott- hey man, thanks for your thoughts on this. I'm kicking myself for letting that $100 price get by a while back.
OJ
Who knows, you may see it again with the way things are and how ultimately frustrating Gilead has been as an investment - the bizarro world moment where Gilead beats by 62 cents last quarter 2-3 weeks ago and generally knocks the ball out of the park and the stock basically goes down over the next couple of days after.
I hope not from an investment standpoint, but I guess my view is that I'm not going to try and time that kind of thing anymore if the present valuation and situation makes strong sense. I suppose it it moves lower into the dividend soon I'll just look at it as reinvesting at lower levels.
Again, the other thing for me is that I feel more comfortable investing in "needs" over "wants" and healthcare certainly plays into that rule. Despite the volatility inherent in a GILD or a CELG, I sleep better at night with those names than a lot of other things as ultimately they are making discoveries that are helping people and providing a need. While the outlook for these companies depend on a lot of variables, you do have Celgene noting "Celgene expects to meet or exceed previous 2017 guidance, although the company is not raising that forecast at this time. The company still expected net product sales in the $13-14 billion range and adjusted earnings per share of $7.50."
"Who knows, you may see it again with the way things are"
@Scott- Yes, I think that you're right there: when we get a meaningful correction, for whatever reason, there might very well be a better buying opportunity for GILD. In the meantime, though, I've got some bond stuff than probably should be pruned, and I'm looking to use that to gild the portfolio. Thanks again- I was just leery about buying at the top, so your info is very helpful. Hold-Harmless Clause: If I should happen to get burnt on this, you'll never hear a word from me. MFLDX didn't work, but I'm quite happy with GASFX. I appreciate your groundwork, however things work out.
I added to my FSPHX holding this week. Still in GILD as I think it's undervalued, but I agree with the discussion that GILD is a frustrating stock. I've been through thick and thin with GILD. Both FSPHX and GILD are long term holdings for me.
I agree about healthcare levitating higher for the foreseeable future. I just prefer to be more diversified in the sector by owning a fund, while holding a smaller position in GILD also.
As for MFLDX, I still own it - the fund has lost its way in some regards, but I still have confidence in the intelligence of management and their ability to right the ship. I still have a longer term view on it and basically, there is not a mutual fund that does not go wrong at some point. If someone knows a mutual fund that has not had a bad stretch over a longer-term let me know.
Fairholme has basically had a difficult 3-5 years, as well. CGM Focus, the list goes on. Yacktman has been towards the back of the pack in recent years. FPA Crescent has had lackluster years. There have been very few managers that have not run into some degree of difficulty at some point and it becomes questions like opportunity cost, confidence in management, size of position and other aspects. Personally, for me MFLDX still fits. This is also a situation where I wanted to keep the original share class.
At some point, it may not. I have a long-term view on my investments but often continue to evaluate them in the bigger picture.
Okay, I wasn't sure if valuation was the key thing here. I don't own GILD. AAPL on the other hand had a good if not excellent quarterly report and the stock went down. I have read that the hedge funds were unloading on the good news. This has been ongoing for a while now.
I own both GILD and BMY, but prefer to add to BMY to GILD, BMS has several break through immuno oncology assets which could transform the cancer treatment particularly in melanoma and lung cancer, the concern with GILD is that what is after HCV, those HCV patients will be cured, which is very different from GILD's hiv drugs, which transformed the GILD from a small biotech to the giant pharma company in the last twenty years.
" the concern with GILD is that what is after HCV, those HCV patients will be cured, which is very different from GILD's hiv drugs"
"An estimated 3.2 million people in the United States are infected, but the vast majority of them don’t know it,” Dr. Mark S. Sulkowski, a liver specialist at Johns Hopkins University School of Medicine, said in an interview."
Ultimately, I think there is a reliance upon HepC in terms of GILD's revenue. The question becomes does one think that management that has gotten the company to this point will not be able to continue to evolve and discover and have successes in the pipeline. I mentioned Apple and I suppose in a way it's somewhat similar in that you have a lot of reliance upon the iPhone. In terms of purchases, people were terribly upset about Gilead's purchase of Pharmasset for 11B, then that turned out to result in HepC medication that had 10.3B in sales in 2014, its first full year on market.
However, I think there is a significant continued road in terms of HepC, with the idea that there are a lot of people who are unaware, as noted above. Gilead is also venturing into NASH treatment and I think that could be a considerable market, especially with the reasons why more and more people are effected by it. See bold.
"NASH affects 2 to 5 percent of Americans. An additional 10 to 20 percent of Americans have fat in their liver, but no inflammation or liver damage, a condition called “fatty liver.” Although having fat in the liver is not normal, by itself it probably causes little harm or permanent damage. If fat is suspected based on blood test results or scans of the liver, this problem is called nonalcoholic fatty liver disease (NAFLD). If a liver biopsy is performed in this case, it will show that some people have NASH while others have simple fatty liver.
Both NASH and NAFLD are becoming more common, possibly because of the greater number of Americans with obesity. In the past 10 years, the rate of obesity has doubled in adults and tripled in children. Obesity also contributes to diabetes and high blood cholesterol, which can further complicate the health of someone with NASH. Diabetes and high blood cholesterol are also becoming more common among Americans."
BMY's a very good choice, too and something that I've considered lately. As much as I already have in terms of healthcare, I still continue to have a great deal of interest in the industry and perhaps will have more in healthcare than I initially planned. Still, having an overweight in healthcare really doesn't stress me. I do see some of the same concerns with GILD - as I've noted before, there is certainly risk - but have come to the conclusion that the company as is in terms of management, valuation and other elements remains compelling.
@scott, I also noticed several rail related stocks are oversold, do you know what is happening there?
I think there are a lot of concerns about declines in oil-by-rail shipments as well as general concerns about the economy. Coal is also down huge. I mean, look at KSU: "Coal carloads are down 44%, below our 7% decline target," BAC analysts mentioned.
Look at UNP in terms of coal, as well: "Union Pacific Corp.’s coal shipments are down 25% so far in the second quarter and the railroad operator doesn’t expect much improvement for the rest of the period, Chief Financial Officer Robert M. Knight Jr. warned.
That is much steeper than the midsingle-digit decline company executives had forecast last month.
Still, it becomes what is an acceptable entry price for those with a longer-term view. Basically, I own railroads and have a very long-term view on them. Given the nature of the industry - you will not have another railroad built in this country, plus there may be consolidation - the long-term hard asset appeal and inflation protection over the long term remains pretty tremendous. There are so many elements - look at CP and UNP selling off excess land lately.
The rails are not low volatility investments, but they are pretty much the definition of wide moat investments and have a lot of appeal (I think) as long-term investments for those who can have that view of years.
Got stopped out on Union Pacific which I held for some time, will hold the cash for now. Its still below my sell price. Rebought ARII, will hold on for the next wild ride. What I wish I had not sold was SKX, sold when i hit 35% profit, now its up 50% from where I sold it. I seem to have more patience with my funds than my stocks. Live and learn.
Thanks Scott, I am also very much interested in rail stocks. Regarding NASH, if you like this indication and have a long term view, please check out ICPT, the company just announced that they have an agreement with FDA on their phase III design on their NASH compound.
One more small purchase of BPY (which is still trading noticeably less than book and quite a bit less than what the company is reporting IFRS book value is), one more small purchase of CNI.
Comments
In a lateral move I sold CNP and bought SO. Better dividend yield and better dividend growth prospects.
My current asset allocation of about 20% cash, 20% income, 50% equity and 10% other leaves me heavy in cash and light in income from my normal allocation ranges. In addition, I am neutral in equity at 50% with a low range of 40% and a high range of 60%. Since, I feel the markets are way overbought, at this time, I am not doing much except watching. I'll become more active when I feel it's time to open a new equity spiff position.
I think it is interesting that Bank of America has come forward and expects a decline in the markets and recommends investors increase their cash allocation and even perhaps buy some gold. You can read more about this in the link below.
http://www.marketwatch.com/story/bank-of-america-is-forecasting-a-scary-summer-for-the-stock-market-2015-05-18?siteid=yhoof2
Have a good summer ...
Old_Skeet
Look at the picture in the link that Skeet provided above of the girl at the beach.
http://www.marketwatch.com/story/bank-of-america-is-forecasting-a-scary-summer-for-the-stock-market-2015-05-18?siteid=yhoof2
Why does the girl have what looks like a ketchup bottle buried in the sand?
Anyways, in terms of a scarier Summer, I don't know. You have a market that has been so distorted by economic policy that I continue to focus on needs. People need medicines from GILD and CELG and other such companies. People need sanitation and hygiene from ECL. I'm not going to sit here and time things.
I've always had a "needs over wants" philosophy and have only leaned more in that direction lately.
Edited to add: ended up adding to GILD and CNI. Wasn't going to add to GILD anymore but I just still find it quite appealing at this level. As for CNI, the rails are oversold. May also add to CELG.
@scott: Looks as if she's constructing a pretty neat large sea creature eating someone. I suspect the ketchup may be for the finishing touch. Pic must have been posed- note the pristine condition of the clothing of the person being "eaten".
What's your thought on a high-end value for GILD?
Notice from review of my asset allocation I have not sold out of the markets but I have adjusted it for the summer where stocks have a history, more times than not, of going soft. Still with fifty percent invested in equities with an allocation range of 40% to 60% ... I think you'll agree that I do have equity representation, perhaps more than warranted. I do feel, at this time, thirty percent in cash would be too much so I am not entering summer at thirty percent but might get there before fall arrives.
I think every investor has their own style and strategies and there are many more than one avenue one can follow to be a successful investor. I use a mixed style of actively engaging the markets along with core investments that are invested for the long run. I wish you much success ... however, I going to take a break form the markets at this time as I feel they are too richly valued for my taste to actively engage them. Most likely, I'll be doing some more selling before I do much buying.
Being an active investor, that I am, I have to stay in tune with the markets and position my spiff buys where I am finding opportunity. Currently, I am finding little opportunity and with this and the coming of summer it is a most welcome time for me to take a break.
I wish all a good summer ... and, I sincerely wish everyone the very best regardless of which investment avenue you choose to follow. Mine, for sure, is not for everyone for it requires me to monitor the markets often in order to position special investment spiffs with ever chaning market movement. I closed out my last open equity spiff back in April. And, I don't think my cash will go stale while I go play and enjoy the summer.
Should the S&P 500 Index pull back to around say 2,000 ... Then I'll open shop and most likely will trim my equity allocation by another five percent. If the Index should pull furter back to say around 1,900, then I'll trim again. Should it reach 1,800 then I start to perk up become more active; and, perhaps, engage it again with some spiff buys.
Again, I wish all a good summer.
Old_Skeet
Derf
No recent changes. Been at 18% cash & short-bond for a long while - reflecting my own lack of conviction one way or the other. Normal hold (cash) ranges from about 10% - 25%.
Nice shot of girl at beach. One thing I've learned at the beach is not to gawk at folks or be bemused by odd behavior there. Pretty much anything goes - as long as you don't get arrested
RIMOX
With Theodore Stohner and Graham Rainbow on the sub-advised portfolio management team what could go wrong,man?
http://www.citynationalrochdalefunds.com/fundinformation/download/quarterly/Fixed_Income_Opportunities-1Q15.pdf
And here: LEOOX. Fed experience should give Mr Bianco insight on bubble formation,right?
Frank Bianco, CFA, Director, Portfolio Manager/Analyst, is a Portfolio Manager/Analyst for all capital structure and convertibles-based strategies.
Previously, he was a senior research analyst in the Credit Risk Management division of the Federal Reserve Bank of New York.
http://financials.morningstar.com/fund/management.html?t=LEOOX®ion=usa&culture=en_US
I have seen a number of people make a case for much higher numbers for GILD. Personally - and things may change - if it runs up fairly quickly to the $125-130 level, I'll look to take some profits, but keep the rest. If it moves up to $125-130 over a somewhat longer period, then I'll have to make a decision at that point based upon what has transpired over that time. Gilead has been a frustrating stock, but I think that ultimately the dividend and the valuation has made it - at least personally - an easier sit.
I've been quite impressed with Gilead - as someone who found themselves in it when it got obliterated with the Express Scripts/Abbvie announcement, I added and then was impressed at how quickly management handled the situation.
As I always note, there are certainly risks (it's biopharma, something could happen and it could be up or down 5% or more in a heartbeat), but I think Gilead does have excellent management - there are worries about a company that is largely reliant upon HIV and particularly HepC treatments. The market I think is quite concerned that Gilead is not going to be able to replicate their success and that there will be pressure on prices. At what point is a lot of that risk priced in? Some discussion that GILD may be on to a functional cure for HIV. There's a lot in the pipeline that is not priced in. I find NASH and their focus on that to be really interesting and have a lot of potential. Gilead does not have a lot of employees - 7500 or so. MRK has about the same market cap and 70,000 employees.
Robin Washington - Chief Financial Officer
"Yeah. It’s a good point. I mean, first of all, I’d say that we have a very highly, what we call it, as operationally leveraged model. So while we only have 7500 employees, we leveraged CMOs for manufacturing and we leveraged CROs and outsourced a lot of our clinical development activity. So our true population of employees that work on getting Gilead products to market is a lot larger. It’s just done in a very different way. And I think that’s given us a lot of flexibility over the years.
I think what you’ve heard executive management talk about relative to the culture and how we do things, I think has to do with again what’s been core to our success and the focus on science. And I think we’ve got at a very top of our organization, very senior scientists that are very closed to the data and close to what we do in the labs and the clinics. And that’s something that we want to retain, where we see us being able to add value to an acquisition is in earlier stage areas where we can influence the development path.
We’re not necessarily interested in M&A that if focused on synergies it causes us to spend a lot of time downsizing. So it’s not so much just a headcount. I think it’s just really where we think we can add the most value to M&A that we might consider." (http://seekingalpha.com/article/3195936-gileads-management-presents-at-ubs-2015-global-healthcare-conference-transcript?page=2&p=qanda&l=last)
Obviously, GILD is not as cheap as it was when it was hit with the ESRX/ABBV situation and it fell into the $80's or when it was around $100 a week or so ago, but in terms of putting money to work, I still saw GILD appealing earlier today.
I also own CELG, which I think is interesting for different reasons, but does not share the same cheap valuation.
Overall, I've become more and more interested - both on an investment level and personally, from simply wanting to learn more - in healthcare. Gilead and Celgene - at some level - will likely be long-term holdings. I may explore other options.
Again, the other thing for me is that I feel more comfortable investing in "needs" over "wants" and healthcare certainly plays into that rule.
OJ
I hope not from an investment standpoint, but I guess my view is that I'm not going to try and time that kind of thing anymore if the present valuation and situation makes strong sense. I suppose it it moves lower into the dividend soon I'll just look at it as reinvesting at lower levels.
Again, the other thing for me is that I feel more comfortable investing in "needs" over "wants" and healthcare certainly plays into that rule. Despite the volatility inherent in a GILD or a CELG, I sleep better at night with those names than a lot of other things as ultimately they are making discoveries that are helping people and providing a need. While the outlook for these companies depend on a lot of variables, you do have Celgene noting "Celgene expects to meet or exceed previous 2017 guidance, although the company is not raising that forecast at this time. The company still expected net product sales in the $13-14 billion range and adjusted earnings per share of $7.50."
"New on Monday morning was financial guidance for 2020. Celgene expects net product sales to reach $20 billion and adjusted earnings per share of $12.50. " (http://www.thestreet.com/story/13007744/1/celgene-has-2020-vision-for-long-term-growth-but-plays-safe-for-2017.html)
@Scott- Yes, I think that you're right there: when we get a meaningful correction, for whatever reason, there might very well be a better buying opportunity for GILD. In the meantime, though, I've got some bond stuff than probably should be pruned, and I'm looking to use that to gild the portfolio. Thanks again- I was just leery about buying at the top, so your info is very helpful.
Hold-Harmless Clause: If I should happen to get burnt on this, you'll never hear a word from me. MFLDX didn't work, but I'm quite happy with GASFX. I appreciate your groundwork, however things work out.
Just a thought.
I agree about healthcare levitating higher for the foreseeable future. I just prefer to be more diversified in the sector by owning a fund, while holding a smaller position in GILD also.
Sold LSOFX. Manager in Jail, I bail.
Actually, let me cull the BS. Bought a car with the proceeds.
As for MFLDX, I still own it - the fund has lost its way in some regards, but I still have confidence in the intelligence of management and their ability to right the ship. I still have a longer term view on it and basically, there is not a mutual fund that does not go wrong at some point. If someone knows a mutual fund that has not had a bad stretch over a longer-term let me know.
Fairholme has basically had a difficult 3-5 years, as well. CGM Focus, the list goes on. Yacktman has been towards the back of the pack in recent years. FPA Crescent has had lackluster years. There have been very few managers that have not run into some degree of difficulty at some point and it becomes questions like opportunity cost, confidence in management, size of position and other aspects. Personally, for me MFLDX still fits. This is also a situation where I wanted to keep the original share class.
At some point, it may not. I have a long-term view on my investments but often continue to evaluate them in the bigger picture.
"An estimated 3.2 million people in the United States are infected, but the vast majority of them don’t know it,” Dr. Mark S. Sulkowski, a liver specialist at Johns Hopkins University School of Medicine, said in an interview."
Ultimately, I think there is a reliance upon HepC in terms of GILD's revenue. The question becomes does one think that management that has gotten the company to this point will not be able to continue to evolve and discover and have successes in the pipeline. I mentioned Apple and I suppose in a way it's somewhat similar in that you have a lot of reliance upon the iPhone. In terms of purchases, people were terribly upset about Gilead's purchase of Pharmasset for 11B, then that turned out to result in HepC medication that had 10.3B in sales in 2014, its first full year on market.
However, I think there is a significant continued road in terms of HepC, with the idea that there are a lot of people who are unaware, as noted above. Gilead is also venturing into NASH treatment and I think that could be a considerable market, especially with the reasons why more and more people are effected by it. See bold.
http://www.gilead.com/news/press-releases/2015/1/gilead-sciences-announces-acquisition-of-phenex-pharmaceuticals-development-program-for-nonalcoholic-steatohepatitis-nash-and-other-liver-diseases
"NASH affects 2 to 5 percent of Americans. An additional 10 to 20 percent of Americans have fat in their liver, but no inflammation or liver damage, a condition called “fatty liver.” Although having fat in the liver is not normal, by itself it probably causes little harm or permanent damage. If fat is suspected based on blood test results or scans of the liver, this problem is called nonalcoholic fatty liver disease (NAFLD). If a liver biopsy is performed in this case, it will show that some people have NASH while others have simple fatty liver.
Both NASH and NAFLD are becoming more common, possibly because of the greater number of Americans with obesity. In the past 10 years, the rate of obesity has doubled in adults and tripled in children. Obesity also contributes to diabetes and high blood cholesterol, which can further complicate the health of someone with NASH. Diabetes and high blood cholesterol are also becoming more common among Americans."
BMY's a very good choice, too and something that I've considered lately. As much as I already have in terms of healthcare, I still continue to have a great deal of interest in the industry and perhaps will have more in healthcare than I initially planned. Still, having an overweight in healthcare really doesn't stress me. I do see some of the same concerns with GILD - as I've noted before, there is certainly risk - but have come to the conclusion that the company as is in terms of management, valuation and other elements remains compelling. I think there are a lot of concerns about declines in oil-by-rail shipments as well as general concerns about the economy. Coal is also down huge. I mean, look at KSU: "Coal carloads are down 44%, below our 7% decline target," BAC analysts mentioned.
Look at UNP in terms of coal, as well: "Union Pacific Corp.’s coal shipments are down 25% so far in the second quarter and the railroad operator doesn’t expect much improvement for the rest of the period, Chief Financial Officer Robert M. Knight Jr. warned.
That is much steeper than the midsingle-digit decline company executives had forecast last month.
At a transportation industry conference Wednesday, Mr. Knight attributed the weak coal shipments to low natural-gas prices as well as very mild weather. Union Pacific started this year with its utility base “having above the five-year average under inventory stock piles,” he added." (http://www.wsj.com/articles/union-pacific-finance-chief-says-coals-slide-is-deeper-than-expected-1432139529)
Still, it becomes what is an acceptable entry price for those with a longer-term view. Basically, I own railroads and have a very long-term view on them. Given the nature of the industry - you will not have another railroad built in this country, plus there may be consolidation - the long-term hard asset appeal and inflation protection over the long term remains pretty tremendous. There are so many elements - look at CP and UNP selling off excess land lately.
The rails are not low volatility investments, but they are pretty much the definition of wide moat investments and have a lot of appeal (I think) as long-term investments for those who can have that view of years.
Regarding NASH, if you like this indication and have a long term view, please check out ICPT, the company just announced that they have an agreement with FDA on their phase III design on their NASH compound.