This month, I’m continuing my search for stock that may benefit the current situation and will also do good in the long run, regardless of what happens.
What’s not to like about pharmaceutical companies in a world where more people are sick than ever, and we’re counting on drugs to give us back our freedom.
Although pharmaceuticals may sound like a sure bet, keep in mind:
That said, there is one big certainty. People are counting on drugs to help them. Especially as more and more people get older and older, you can be sure of one thing, people will keep buying drugs. Not just during the Corona crisis.
A good way to mitigate the risk and enjoy the benefits is to diversify. And that’s exactly what we do around here.
I’ve previously written about biotech companies. For that portfolio, I was looking for big risk in return for potential big rewards.
This time, I’m taking the opposite approach. I want big companies with lots of money (and thus also proven track records).
I’m talking about large cap.
And as last month, I’m also taking into account the debt ratio and the cash on hand combined with short term investments.
These are the rules for the portfolio:
|Symbol||Name||Current Price||Cash & Short Term Investments||Enterprise Value||Debt ratio|
|GILD||Gilead Sciences Inc||81.26 USD||24.35B USD||109.85B USD||63.25%|
|JNJ||Johnson & Johnson||151.67 USD||19.29B USD||418.44B USD||62.30%|
|BMY||Bristol-Myers Squibb Co||61.68 USD||15.39B USD||133.83B USD||60.22%|
|ROG.SW||Roche Holding AG||330.80 CHF||12.27B USD||296.01B USD||60.59%|
|NOVN.SW||Novartis AG||86.69 CHF||11.45B USD||225.81B USD||53.07%|
|SANF.MI||Sanofi||87.73 EUR||10.86B USD||132.26B USD||47.57%|
|MRK||Merck & Co Inc||83.10 USD||10.45B USD||233.10B USD||69.19%|
|PFE||Pfizer Inc||36.08 USD||9.83B USD||260.09B USD||62.12%|
|AMGN||Amgen Inc||236.60 USD||8.91B USD||164.58B USD||83.80%|
|AZN||AstraZeneca PLC||50.44 USD||6.18B USD||145.49B USD||76.22%|
A lot of big names in there, so that should at least give us some stability. And according to Uncle Stock’s backtesting, we can expect a 10% yearly return.
My philosophy: If you want to invest and your goal is to try to beat the market, you need a system. You need a system that can decide for you what to buy, when to sell and not to panic when things go down. Everything starts with selecting stock. You should not just select random stock here and there based on whims or things you read. No, create a system that suites your style and follow it. These posts give you example of what such a stock selection could look like.
Disclaimer: Don't believe anything I say or write. Always do your own research before making any investment decisions.