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Participant ○

ABBV, at what price?

I would like to add to my ABBV position.

Now, or should I wait for a lower entry point?  

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28 Replies
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Frequent Contributor

Re: ABBV, at what price?

          kzug - if you check a chart it’s value is about the same as 2017. In the middle of a pandemic during an economic crisis seems like as good a time as any if your a market timer. Those don’t come along that often. Though the usual scheduled healthcare reform committees may come along after this so it probably will plunge then.

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Frequent Contributor

Re: ABBV, at what price?

I think it might be a "he who hesitates is lost" situation.

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Frequent Contributor

Re: ABBV, at what price?

Hi Kzug,

You can read more about the source of this list HERE

6-1 Test.jpg

I already own ABBV and BMY on this list.  I began a cursory fundamental analysis on this list looking for weak balance sheets.  Below are the candidates that met this first threshold.

6-1 Test filtered.jpg

My portfolio is heavy in Health care for reasons made obvious in these lists.

For my portfolio, AMAT could be the best choice.Next, I will do a cursory dive deeper by clicking on the right-pointing chevrons titled MORE.  If it still looks good, I will do more T/A and balance sheet investigations.

This is my starting point. AMAT has one of the weakest balance sheets that made the first cut.

AMAT.jpg

Either list is strong. A nice fishing pond. It all depends on what you already own.

Thank you,

Holiday

 

 

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Frequent Contributor

Re: ABBV, at what price?

Hi @kzug,

Sorry, but I think I wandered off-topic. ABBV was on the list I was researching this morning which is why I replied.

This is ABBV.  I would still buy it today.  It comes with a 5% yield !

abbv 7.jpg

I am sticking with high quality and defensive in most cases.  The economy is still sketchy and will not support strong risk taking in my view. Armed militia at state capitals, and riots across the country makes me worry about civil war. 

Thank you,

Holiday

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Frequent Contributor

Re: ABBV, at what price?

Agree @Holiday  I would buy too. Right now I am feeling the same way, quite defensive. Beyond this, I think it is a good buy.

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Participant ○○

Re: ABBV, at what price?

ABBV is one of my favorite pharmas (and I own a number of pharmas). I think this is an ok entry point .

The dividend is remarkable IMO during this exceptionally low-interest rate environment.

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Frequent Contributor

Re: ABBV, at what price?

Hi Kathie,

After reading your post, I poked around in the healthcare sector a bit.  This was my screen.

Health Care Screen 2.jpg

The circled names are the companies I already own. The arrows are the ones that look like the pick of the rest to me.

I have been watching Eli Lilly LLY for some time but my pharma space is pretty full.  There was a news release yesterday about an anti-body treatment for Covid-19 that has reached the human trial phase. I think the P/E is priced higher because the forward EPS growth is higher at 12.4%

The dividend is priced at 1.94%, and like many Pharma companies, they have a strong balance sheet.  Lilly did not make the previous screen because their  P/E ratio is 25.  I can start the process of diving deeper by clicking the right pointing chevrons titled MORE, but that takes me down a potential hour's long path for each stock.

LLY.jpg

LLY 2.jpg

I have also been watching Merck since the market bottomed.  MRK is priced for a 3.07% yield. The mid and longer term T/A for MRK is weak which might be explain it's lower P/E, higher yield, and lower forward EPS growh at 6%. 

This is what the same cursory analysis looks like:

MRK.jpg

MRK 2.jpg

Do you have any thoughts?  For now, I am going to put this research on hold.  I will need to look at the other stocks I own to see why they did not make the list.

In contrast, the broad health care index has a P/E of 40 today. 

Thank you,

Holiday

 

 

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Explorer ○○

Re: ABBV, at what price?

As always, it depends on what you are buying for.  Long-term hold?  Short-term?  As a dividend stock?  I tend to focus on technical analysis, which is always a bit subjective, but I see a double top on its weekly chart, which would be negative.  That is, it hit a closing high of about 94 in February and again just recently, coming down a bit since then.  I believe that in the technical analysis lingo, that would be that it hit resistance and retreated.  So, that would lead one to be to be wary at this point.  Better to wait and see if it comes down further, to some level of support, such as its 20 day exponential moving average or even its 50 day simple moving average.

Conversely, if it goes higher, see if it breaks out above its recent high, which would be 96 on the daily chart.  That would be extremely bullish given that it would be a high since late April 2018.

So, if it were me, I would wait, but I am more of a short-term trader using technical analysis.  I suspect that you, and most on this  forum, lean more to long-term, fundamental analysis. 

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Participant ○○

Re: ABBV, at what price?

Holiday,

Here are some of my thoughts.  (I already posted that ABBV is currently my favorite Pharma, and that hasn't changed.). 

I've owned most of the major pharmas at some point in the last say, 10-20 years,  I used to enjoy speculating on the little biotechs - it was fun, you either made a lot of money or lost everything you put into it, so once I got close to retirement, I stopped playing in that sandbox.  Let me comment on Merck and Lilly since those are the other two you are interested in.  I bought Merck when it was out of favor, when the analysts were complaining about its pipeline.  The price has since doubled.  Their blockbuster drug, Keytruda, is used in treating many kinds of cancer.  It seems like it gets approved for a new indication somewhere in the world at least once a week,  I think it's very good company, and you've looked at their balance sheets.  Their CEO is going to retire this summer, I believe.  Too bad - I really like him.  I don't see this as being a problem for Merck, but wanted to mention it.  

Lilly - it's been a few years since I owned it.  Good company, used to pay a better dividend (I think it was paying close to 5% when I bought it).  Once it started being priced like a biotech, I sold it for a big gain - doubled my money if I remember correctly. I know it is tempting to buy a company that says it may have treatment for COVID, but I think all of the pharmas have drugs that may treat COVID, so I would take that with a few grans of salt.  Likewise, the estimates of EPS growth is a guess, I wouldn't make my investment decision based on that.

The other pharmas I currently own are AZN (they got a lot of money from the US gov to develop a COVID vaccine from the Oxford research), GSK (which is always a powerhouse in vaccines), and PFE.

If I had money to put into a Pharma, I'd buy more ABBV, but I'm at my 5% limit.

Best of luck to you.

PS. As an income investor, I do have a bias toward companies that pay higher dividends and it has served me well.

Correction, I am not up 100% on MRK though I was a month or so ago.

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Participant ○○

Re: ABBV, at what price?

I hope those of you thinking about ABBV got in before it topped $90.  

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Frequent Contributor

Re: ABBV, at what price?

Hi Kathie,

My individual stock limit is 1% of my total portfolio which is roughly 3% of my equity allocation so I am already there too.  I filled up when the yield was around 6.3%. I DRIP my stock positions; CEF, OEF, ETF, Preferreds, or Individual Stocks because they have a long time-horizon. My ladders and fixed positions will more than fund my retirement for a period longer than I will be around anyway.  That is if I stay happy with my present lifestyle. 

I still like ABBV as a long-term position.

Holiday

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Explorer ○○

Re: ABBV, at what price?

A very nice run, essentially from 90 to 96, in just a handful of trading days.  Wish I could say that I bought it.  Woulda, shoulda, coulda.   I would say be careful at this level (again re the short term, which may not matter to many).  First, it has hit its near-term high.  Will it retreat or surge higher? That is the question.  The candle that printed today is a bit of a warning sign.  Still, it went higher today.  Did not finish below its start.  Maybe it surges tomorrow, which means blue-sky territory.  Maybe it consolidates for a while, which wouldn't be so bad. (How's that for covering all the bases!)  

Intermediate-term it looks strong.  It has great volume to the upside since last August, except for the March sell-off. Thanks to everyone for bringing this stock to our attention. 

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Participant ○

Re: ABBV, at what price?


@KathieL wrote:

I hope those of you thinking about ABBV got in before it topped $90.  


Yes, after the stellar advice I got in this thread, I tripled my position right at $90. 

This will hopefully be a longer term hold.   

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Frequent Contributor

Re: ABBV, at what price?


@KathieL wrote:

I hope those of you thinking about ABBV got in before it topped $90.  


My initial buy was in late March of this year, Kathie. Purchase price was in the high $60's and latest purchase price was $92.18.

Best to you.

Out

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Participant ○○

Re: ABBV, at what price?

I started buying ABBV in 2018 after its share price dropped 20%. I bought too soon, as it went even below my initial buy at $96,  but I dollar cost averaged.

Eventually, I sold my taxable account shares purchased in 2018 at a  14% gain back in January, I admit it was a relief as it was a up/down ride.  My IRA shares only had an 8% gain at that time, now 14%.   I decided to hold the IRA shares for long term. I was getting close to 5% yield on the dividend. Management was forecasting growth. Most analysts are bullish. The merger is done. My only concern is that dollar cost averaging has increased my original stake to 5% of my IRA, Too high for one stock, so I will be  reducing that.

 

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Follower ○○

Re: ABBV, at what price?

Abbv dividend is under "Qualified" or "non'qualified"  ?

thank you

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Participant ○○

Re: ABBV, at what price?

Qualified.

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Frequent Contributor

Re: ABBV, at what price?

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Follower ○○○

Re: ABBV, at what price?

ABBV is on Morningstar's Income Bellwethers list (not in portfolios - but stocks recommended for research as I understand it).

I bought a fairly hefty position last year at 79.

It currently has a Morningstar fair value of 97 and indicated past dividend growth of 20.9 %.

Wish I had a portfolio full of winners like this.

Good luck,  Joe

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