Thursday, April 9, 2009


Given the lack of a guarantee and a float of .5% above 3 month Libor, I decided to sell the 100 of GJO at $17.08 which I just bought at $16.5. JNJ Upgrade by UBS/Buy of GJO/Lottery Ticket PurchasesHopefully, I will be able to buy it back at or below $15 which would make me more comfortable holding it. In its place, I bought 50 shares of Novartis (NVS) at $36.9. This is about 10 times the analyst consensus estimate for 2009 and close to 9 times the $4 estimate for 2010. If those numbers hold up for this quality company, then the P.E.G. is close to 1 with about a 10% forecasted growth in earnings. I mentioned in an earlier post that I would wait for Novartis to fall back after a spurt in price following the FDA's recent approval of Afintor for advanced kidney cancer patients that have not responded to other treatments. Novartis claims that the drug targets a protein that appears to underlie several different kinds of cancer. While it is just my opinion, I am surprised that I am able to buy quality companies at 10 times earnings, with sound finances, and growing earnings in a fairly reliable fashion at 10%. I would expect to pay at least 15 times earnings for a company like Novartis which would put the price close to $54. The dividend yield is over 5% but it just went ex dividend. One of its major drugs, Diovan, goes off patent in 2012 subject to check. S & P has it rated 3 stars, a hold, with a $54 price target which is just odd for a $36 stock. Morningstar has a good report on NVS, rating it 5 stars and a consider to buy level at around 54 and change.

It is good to be positive for the year again.


I am not a financial advisor but an individual investor trying to navigate my way through a difficult market. I have never worked for a financial institution and never will. In these posts, I am acting as an unpaid financial journalist and an occasional political commentator. I am also aggregating financial news stories that I view as important and providing any reader of these posts, assuming there are more than a couple, with links to those articles, sort of a filtered, somewhat intelligent, free search engine. Any discussion made by me of particular securities is not a recommendation to buy or to sell. Trade at your own risk. Consult with your financial advisor prior to making any purchase or sale. I will try to identify my sales too but it may take a few minutes after I implement them to create a post explaining my reasons. The sale may before or after the post. Before buying or selling any stock, even one recommended by a trusted financial advisor, please research it and make up your own mind which is what I always try to do. Research would include reading reports, reviewing financial records, earnings estimates, sec filings and prior earnings releases and news. In this post, and all others by me, I am merely describing my reasons for purchasing or selling securities, and the potential pitfalls that I identified prior to purchase or the reasons for a sale. The securities mentioned in this and all posts written by me may not be suitable for others based on their unique financial position and risk profile. By way of example, it is unlikely that I will ever need the funds contained in my retirement accounts. Always read the prospectus before buying a Trust Certificate, bond, preferred stock or other bond or bond like investments. Information contained in my posts has been obtained from sources believed to be reliable but cannot be guaranteed. It is always important to follow the investment process. the investment process/links to further information on canadian energy or royalty trustsInvestment Process Part II: Bonds and Bond Like Investments NOT A RESEARCH SERVICE/Add of PWE Last Week These posts by me do not constitute investment advice, nor shall they be construed as a guarantee of future results, or as an offer of any transaction in securities. All content in these posts is provided for informational and entertainment purposes only, and it is a form of entertainment for me.

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