As we reviewed our portfolio this quarter, we found ourselves in an unusual position…with nothing to do. We, thus, heeded Warren Buffett’s wise advice, “When there is nothing to do, do nothing.” With the stock market trading near record highs, undervalued stocks were as scarce as hen’s teeth as we shopped for new stock ideas. At the same time, most of our stocks were trading in a zone of reasonableness, which enabled us to patiently sit on our assets as the underlying values of our highquality businesses continued to grow.
However, if Mr. Market pushes stock prices much higher through a Santa Claus rally, we may stuff some additional profits in our stockings this year from stocks attaining full valuations.
On the other hand, Mr. Market may turn into a Grinch by greeting the Federal Reserve’s expected December interest rate hike with fear. If this drives stock prices lower like last year, we may find more attractive investment opportunities to deploy cash for the long term.
Gilead Sciences, Inc. (NASDAQ:GILD) reported third quarter revenues declined 10% to $7.5 billion with EPS down 19% to $2.49. Hepatitis C (HCV) product sales declined 31% to $3.3 billion due to a decline in patient starts as the sickest patients have been cured and lower revenue per patient from pricing discounts. Over 1.2 million people have been cumulatively treated and cured of HCV, which is a remarkable scientific achievement. Year-to-date, Gilead has repurchased 110 million shares for $10 billion. (Hold).
Biogen Inc (NASDAQ:BIIB) reported third quarter sales increased a healthy 6% to $3 billion with EPS increasing 13% to $4.71. Biogen’s diverse portfolio of multiple sclerosis (MS) therapies, which help 38% of all treated MS patients globally, increased 3% during the quarter to $2.3 billion.
Total hemophilia sales increased 39% to $217 million. Biogen expects to complete its previously announced spin-off of its hemophilia business into an independent public company early in 2017.
During the third quarter, Biogen repurchased 1.1 million shares for $349 million, or $249.29 per average share. Aducanumab, Biogen’s Phase 3 candidate for early Alzheimer’s disease, continues to show promise, recently receiving Fast Track designation from the FDA. (Hold).