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Strategies & Market Trends : Value Investing

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To: $John who wrote (42156)	4/5/2011 5:36:44 PM
From: Paul Senior	1 Recommendation Read Replies (3) of 78670

A discussion of cheapness of LLY must include Lily's patent expirations. Here's a current analysis by somebody who owns the stock and makes his case: seekingalpha.com "Revenues are nearly certain to fall in 2011 and again in 2012. If Eli Lilly is able to maintain 2012 profit levels beyond that, then the stock is currently fairly valued. If Eli Lilly revenues continue falling beyond that without recover, then the stock is currently overvalued. But if Eli Lilly is able to significantly grow revenues after a few years of declining revenues, then the stock is currently undervalued." For me, too many "if's", too much good stuff has to happen years out to which I can't attach a probability, so I'll pass again now on LLY. Just me, my opinion. Others may be buyers. ================================ If the conclusion that LLY is cheap and is a buy is based solely on that discounted cash flow that I glanced at in that link, well, that is a very dangerous way to value this big pharma.

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