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

To: Spekulatius who wrote (35262)	8/29/2009 11:34:25 AM
From: Paul Senior	Respond to of 78753

Yes, that's a good point re. UG. I'm not sure what the proper valuation edge might be to measure UG vs. bigger companies, but p/e could be a start. In this view, I wouldn't buy UG unless I also would consider PFE, LLY, FRX, SNY - all of which have forward p/e multiples (per Yahoo) at under 8, which beats UG on that metric. One way I look at it is that I already have positions in these companies, so I am willing to branch out and try a microcap like UG. Somebody else could view it as "why bother?" -- instead of risking funds on a dink UG, just continue to add to a position in one or more of PFE, LLY, etc. That could work out okay too (or not). Just hard for me to pass up UG with it's excellent roe history -- in past few years it beats some of these bigger companies. And I get a good dividend while holding. (Not sure what companies are exactly comparable to UG. I just picked the big pharma here because some of these stocks are attractive too (to me) and because UG also considers themselves at least partly a pharma co.)