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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Wallace Rivers who wrote (14156)	3/23/2002 10:21:28 AM
From: Bob Rudd	Read Replies (1) \| Respond to of 78576

Been looking at BMY...even got a 'wishful thinking' order in at 36. I'm increasingly leery of pharma's...as is the market. Their R&D approach's seem to have played out...like an overworked mine verses Biotech development strategies. As such, it's increasingly difficult for the big pharma's to outrun patent expirations sufficient to deliver on growth expectations. Then there's the regulatory risk...not just Hillary redux, but on a number of fronts there's pressure to give the product away. Specific to BMY, I'm concerned about the Imclone/Erbitux mess in 2 ways: 1) The whole thing has been so badly mishandled as to raise real questions about management competence and, 2) I won't be a bit surprised if the whole Erbitux thing proves out to be fraud [Looked at Imclone when it sold off - ran across a NYT article that convinced me Waksal is a weaselly wascal]. That said, BMY does appear to be selling at favorable valuation based on current estimates - I'm just not sure the margin of safety is adequate given the above. When Merrill and others have it rated Neutral, despite optimistic bias and historically favorable valuation, I suspect lack of confidence in those estimates. MCD: I have some and agree that this is a buying opportunity based on premise that they are fixing quality problems in US by using mystery shoppers [among other things], and the European Beef concerns have peaked - improvement ahead on both fronts. Meanwhile Japan's beef concerns are probably peaking or near to it...and Japan is only 5% of revenues. Not expecting a moonshot, but 2-3 years from now, I think MCD will have outperformed market 5+%.