Where to invest in 2024

“The only problem with market timing is getting the timing right” certainly applies to the stock market in 2023. Undoubtedly, economic concerns emerged and events on the geopolitical stage brought further surprises, but we did not experience a recession or recession. Sustained market decline.

There were two 10% corrections along the way, but the average stock price was in the red for most of the year before rising after Halloween, proving that the secret to success in stock investing is not to be scared of it. I understood it again. We will continue to record solid profits throughout the year.

Of course, the outsized contribution of a handful of very large-cap stocks to the returns of a capitalization-weighted market index (such as the S&P 500) still makes it difficult for those looking to move past such conditions. It means a lot of value can be found. It’s called the Magnificent Seven.

Stock market outlook in 2024

In my latest special report, I discussed seven investment themes and wrote that I want to leave the financial worries to others as I seek appreciation and income from a value-oriented portfolio.

in a webinar on Tuesday, January 9th at 1:00 pm Pacific time. discuss A smart speculator’s stock market outlook for 2024Here are some specific stocks that those who share our long-term view should consider heading into 2024.

zoomwelcome! We would like to invite you to the webinar “Where to invest in 2024”. After registering, you will receive a confirmation email to participate in the webinar.

Participants will also receive a copy of the full report.

2024 investment theme

One of the themes is called (temporary) healthcare in Sick Bay. Many healthcare stocks suffered in 2023 as investors shifted their attention away from safer stocks, concerns about government price controls, and question marks over medical expense ratios.

We believe this will be a temporary situation, as long-term demographic trends broadly support continued growth and solid earnings for companies such as: Bristol-Myers Squibb (BMY).

Pharmaceutical giant Bristol-Myers recently announced that it would acquire Karuna Therapeutics for $14 billion in stock, or an estimated $12.7 billion less cash. Karuna is a biopharmaceutical company focused on treatments in the psychiatric and neurological fields and appears well-suited to fill a hole in BMY’s drug pipeline.

Karuna is developing a schizophrenia drug called KarXT and is seeking approval in the US, expanding Bristol’s portfolio in neuroscience, an area of ​​growing interest from a number of pharmaceutical companies. Analysts believe the treatment, if approved, could bring in up to $4 billion in revenue by 2030.

Of course, in the short term, this transaction is expected to dilute BMY’s earnings per share in 2024 by approximately $0.30 due to transaction-related financing costs, but the company is expected to continue to , and we expect to offset operating expenses through improved cost efficiencies. Portfolio prioritization. BMY plans to raise funds for the acquisition primarily through the issuance of new bonds.

Bristol’s management team believes that cash flow and the company’s solid financial profile will allow it to continue to invest in growth through a strong investment grade credit rating and business development opportunities, and to provide shareholders with continued dividends and share repurchases. We believe that it will be possible to distribute

“There are huge opportunities in neuroscience and Karuna strengthens our position and accelerates the expansion and diversification of our portfolio in this space. We look forward to seeing this increase in the number of applications we receive,” said Dr. Christopher Werner, CEO of BMY. “This transaction is a strategically aligned, scientifically sound, and financially attractive asset that is strategically aligned with our business development in pursuing assets that have the potential to address areas of significant unmet medical need.” It fits perfectly with our priorities.”

“The psychoses of schizophrenia and Alzheimer’s disease affect millions of people worldwide, and treatment options are limited. KarXT’s novel mechanism of action provides compelling efficacy and differentiation. “We have revolutionized the profile of schizophrenia with an improved safety profile,” said Sumit Hirawat, MD, Chief Medical Officer. Also as a first-line treatment for Alzheimer’s disease psychosis. ”

Time will tell, but I’m open to an acquisition, but at the moment it looks like a premium of over 50% is being paid over the then market price. With that in mind, strengthening the pipeline is just what the doctor ordered. BMY stock fell more than 25% last year as generic pressure hurt profits from the blockbuster drug Revlimid. However, the benefits of Opdivo, a major oncology product, and several recently launched drugs such as Camzios (cardiomyopathy), Opdualag (melanoma), Zeposia (MS and UC), and Sotiktu (plaque psoriasis) and maintains top line with growth potential across multiple indications.

As such, business development remains a priority for BMY. The stock trades at just 7x NTM-adjusted EPS guidance, which we think is too low a multiple for a company of Bristol’s quality, especially given the stock’s robust 4.6% yield. Masu.

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