Here are the top 5 sectors ranked by the percentage of the group reaching new highs
1- Retail- 25%
2- Chemicals / fertilizers- 17%
3- Internet-isp- 13%
4- Apparel-shoes- 12%
5- Electrical, military systems- 12%
Saturday, June 9, 2007
Top 5 Sectors with Highest Return!
Here are the top 5 sectors YTD ranked by return.
1- Chemicals / Fertilizers +68% (13 stocks)
2- Steel Producers +30% (22 stocks)
3- Trucks & Parts Heavy +45% (13 stocks)
4- Food- Dairy Producers +30% (9 stocks)
5- Transportation / Ships +20% (49 stocks)
Rankings are done by price performance of all stocks in the group. So, a sector that has 5 stocks, one up 100% and 4 up 1% will not be ranked as high as a sector that has 5 stocks all up 15%, thus the differential in rankings vs return.
1- Chemicals / Fertilizers +68% (13 stocks)
2- Steel Producers +30% (22 stocks)
3- Trucks & Parts Heavy +45% (13 stocks)
4- Food- Dairy Producers +30% (9 stocks)
5- Transportation / Ships +20% (49 stocks)
Rankings are done by price performance of all stocks in the group. So, a sector that has 5 stocks, one up 100% and 4 up 1% will not be ranked as high as a sector that has 5 stocks all up 15%, thus the differential in rankings vs return.
Many News Refering To Pharma Industry!!!
* SCOTUSblog reported on Wednesday that the Supreme Court has denied Pfizer's emergency application for relief from the Federal Circuit's ruling in the Norvasc case. TheStreet.com also has an article on the Supreme Court's decision.
* On Tuesday, the Federal Circuit granted Mylan's motion for summary reversal of the district court decision that had found Pfizer's Norvasc patent valid and infringed by Mylan. The Fed. Cir. also reversed and vacated a separate district court decision finding the Norvasc patent valid and infringed by Synthon. Both decisions came without opinion.
* FDA Law Blog reports today that a provision of the FDA Revitalization Act will reform the citizen petition process.
* The Washington Post on Monday reported on continued wrangling between the DOJ and FTC on the legality of reverse payment settlements, such as the one in Joblove.
* Via SCOTUSblog, here is petitioner's supplemental brief in Joblove, responding to the Solicitor General's recommendation that the Court decline to hear the case.
* Barr Labs announced earlier this week that Barr and Lilly agreed to dismiss their litigation over Prozac Weekly.
* Kaisernetwork.org reports that the markup session for the Waxman-Schumer follow-on biologics bill has been delayed to June 20. Supporters of the bill still hope to attach it to the FDA Revitalization Act and pass it into law this year.
* On Tuesday, the Federal Circuit granted Mylan's motion for summary reversal of the district court decision that had found Pfizer's Norvasc patent valid and infringed by Mylan. The Fed. Cir. also reversed and vacated a separate district court decision finding the Norvasc patent valid and infringed by Synthon. Both decisions came without opinion.
* FDA Law Blog reports today that a provision of the FDA Revitalization Act will reform the citizen petition process.
* The Washington Post on Monday reported on continued wrangling between the DOJ and FTC on the legality of reverse payment settlements, such as the one in Joblove.
* Via SCOTUSblog, here is petitioner's supplemental brief in Joblove, responding to the Solicitor General's recommendation that the Court decline to hear the case.
* Barr Labs announced earlier this week that Barr and Lilly agreed to dismiss their litigation over Prozac Weekly.
* Kaisernetwork.org reports that the markup session for the Waxman-Schumer follow-on biologics bill has been delayed to June 20. Supporters of the bill still hope to attach it to the FDA Revitalization Act and pass it into law this year.
Thursday, June 7, 2007
Stock Market Prognosticator and Festival of Stocks
Rick
The 34th edition of the Festival of Stocks appears today in Stock Market Prognosticator, a blog written by Eric J. Fox.
Eric has done a great job in highlighting some interesting posts of the past week covering a wide range of topics from uranium stocks to opening a zero commission brokerage account. Eric has been kind enough to include one of our posts last week, Private Equity Envy.
Eric is a hedge fund manager who seems to focus on deep value, somewhat obscure stocks. A terrific universe that can result in some outstanding returns. Managements frequently forget that they still have a public constituency. Read Eric's post on Biloxi Marsh Land. The financials may be intriguing, the assets may appear interesting, but management clearly does not want to divulge, let alone disclose anything based on Eric's experience.
Years ago, I went through a similar experience with International Speedway (ISCA) while it still lived as a pink-sheet company. Similarly, St. Joe Paper, now known as St. Joe Company (JOE) hardly gave outside investors much disclosure when it lived in the "pink."
Both ISCA and JOE turned into real goldmines as their management discovered that open disclosure and a broadened sharebase actually could help others recognize the intrinsic value. I am sure there are many pink sheet names that also gained "legitimacy" or at least broader recognition as they were launched on more more actively traded platforms and developed fuller disclosure requirements and standards. The Detroit and Canada Tunnel Company for years was OTC-pink and for years, the true value seemed unattainable. After being taken over some years ago, the tunnel is now owned by a fund of Macquarie Bank of Australia.
Enjoy Eric's version of the Festival of Stocks and have a look around his website. In my view, Eric has a great handle on value.
Disclaimer: I, my family, and clients do not currently own any of the securities mentioned in this post.
The 34th edition of the Festival of Stocks appears today in Stock Market Prognosticator, a blog written by Eric J. Fox.
Eric has done a great job in highlighting some interesting posts of the past week covering a wide range of topics from uranium stocks to opening a zero commission brokerage account. Eric has been kind enough to include one of our posts last week, Private Equity Envy.
Eric is a hedge fund manager who seems to focus on deep value, somewhat obscure stocks. A terrific universe that can result in some outstanding returns. Managements frequently forget that they still have a public constituency. Read Eric's post on Biloxi Marsh Land. The financials may be intriguing, the assets may appear interesting, but management clearly does not want to divulge, let alone disclose anything based on Eric's experience.
Years ago, I went through a similar experience with International Speedway (ISCA) while it still lived as a pink-sheet company. Similarly, St. Joe Paper, now known as St. Joe Company (JOE) hardly gave outside investors much disclosure when it lived in the "pink."
Both ISCA and JOE turned into real goldmines as their management discovered that open disclosure and a broadened sharebase actually could help others recognize the intrinsic value. I am sure there are many pink sheet names that also gained "legitimacy" or at least broader recognition as they were launched on more more actively traded platforms and developed fuller disclosure requirements and standards. The Detroit and Canada Tunnel Company for years was OTC-pink and for years, the true value seemed unattainable. After being taken over some years ago, the tunnel is now owned by a fund of Macquarie Bank of Australia.
Enjoy Eric's version of the Festival of Stocks and have a look around his website. In my view, Eric has a great handle on value.
Disclaimer: I, my family, and clients do not currently own any of the securities mentioned in this post.
Making Sense of Deborah's World
Rick
Deborah is a teacher on call out in the unbelievably beautiful city of Vancouver, British Columbia. Education, she claims, is her primary calling.
However, she has an excellent blog called, "Making Sense of My World" a very thoughtful and fundamentally based view of mining stocks.
Many blogs which espouse mining stocks tend to be written by inflationistas or crazies who view every upward jiggle in the yellow metal as portending the death spiral of the US dollar. Having no trust whatsoever in paper currency, their blogs tend to be rantings about Argentine and German inflationary experiences. Every financial crisis takes on epic proportions as a struggle between good and evil. Deborah avoids these histrionics.
Instead, she provides level-headed, soundly reasoned analysis of mining stocks. I value her analysis and recommend it to you!
Please find her link in the right hand column.
Deborah is a teacher on call out in the unbelievably beautiful city of Vancouver, British Columbia. Education, she claims, is her primary calling.
However, she has an excellent blog called, "Making Sense of My World" a very thoughtful and fundamentally based view of mining stocks.
Many blogs which espouse mining stocks tend to be written by inflationistas or crazies who view every upward jiggle in the yellow metal as portending the death spiral of the US dollar. Having no trust whatsoever in paper currency, their blogs tend to be rantings about Argentine and German inflationary experiences. Every financial crisis takes on epic proportions as a struggle between good and evil. Deborah avoids these histrionics.
Instead, she provides level-headed, soundly reasoned analysis of mining stocks. I value her analysis and recommend it to you!
Please find her link in the right hand column.
Economic Worries and Marathon Running
Rick
It is easy to take a dim view of equity markets when we read today's economic report showing US GDP slowing to a lethargic 1.3% pace for the first quarter, well below the expectations of most economists at 1.7%.
It's a good time to remind people of what I view as truism, the economy per se has nothing to do with the stock market, the biggest factor is what price you pay and what level of profitability you are attaching yourself to. You will find I refer to this truism quite frequently, most recently here.
It's easy to get bogged down in the noise, to get spooked by the media's fear-mongering. or news creation Sub-prime mortgage failures prompt curiosity much like rubber-necking a car accident. For the individuals or families, they represent a financial train-wreck and a horrible event. In aggregate however, even with one quarter of last year's originations being sub-prime, and even with defaults potentially hitting 20% rates, we are still looking at only 5% of mortgages that are afflicted. It is also easy to forget about the number of homes that are actually owned "free and clear" a figure that encompasses most of the baby boom generation.
As a value investor, I have little regard or time for most economic forecasts. Avoiding trouble (aka preserving capital) is first and foremost on my agenda. Some of my friends are far better at developing an aggregate stock market view. Let me cite a couple of them that I recommend highly. They have been kind enough to allow me to write occasional guest commentary for them.
Henry To of marketthoughts.com views markets as somewhat overbought, but remains bullish on a market that remains well-supported by private equity buyouts and insider buying as well as numerous other factors that he provides his faithful subscribers.
Another friend, David Korn of BeginInvesting.com remains bullish as well citing bullish insiders, as well as a host of evidence from sentiment indicators. I recommend both of these subscriptions as ways to improve your financial acumen from writers who are far better equipped than I to provide aggregate viewpoints.
Elsewhere in the blogosphere, I have found Interactive Investor Blog's recent post to be quite interesting.Q In a well-balanced post that cites bears such as Barry Ritholz in "The wall of worry now looks like the Great Wall of China " he also cites the very optimistic Ken Fisher, the Forbes columnist, money manager, and yes, Forbes 400 list.
Fisher's optimism is predicated on the spread between earnings yield and government bond yields in markets around the world. In what sounds like a physics argument relating to potential energy, he writes:
" At the beginning of the year the forward earnings yield was 2% higher than the 10 year government bond yield in the US and over 3% in the UK, France, Germany and Japan, yet over long periods the spread between the two has been close to zero. The theory is that when one asset pays more than another, money will flow to it and prices will rise."
Fisher continues,
“This is the beginning of a process that no-one has ever seen before,” says Ken, “In the past, when the earnings yield has been above the bond yield it’s either been in a single country… Or it happened for a very short time. This is the first time in modern history when the earnings yield has been above the bond yield all around the world.”
I am not sure that I am quite this optimistic. Nevertheless, I find it very odd that corporate balance sheets in general have failed to adequately respond to continued low rate opportunities. In a recent screen of S&P 500 non-financial names that I did, fully 30% of the companies had cash plus cash equivalents in excess of total debt. A year ago, the result was similar at about one-third. Looking at all North American companies covered by Reuters, there were 4,334 companies that passed this very far from robust screen. Financial leverage is only appropriate for companies that generate returns on investment above the cost of debt and can do so through cyclical ebbs and flows. Like the fellow who has discovered a hammer and thinks the world is covered in nails, financial engineering by blindly buying back stock willy-nilly can be a prescription for disaster.
Bottom-line, don't let economic aggregate numbers influence your investment thinking. The upside to any turbulence created by such releases is that fear or conversely, bravado creates opportunities.
In looking back at a week of earnings releases, (and remember it is only looking forward that makes you money) I am gratified by results at companies we hold such as 3M (MMM), Aetna (AET) , Harman (HAR), NCR (NCR), National Instruments (NATI), Microsoft (MSFT).
What a strange hodgepodge of businesses, you may think, but several characteristics define them...an attention to return on invested capital, a discipline in running the franchise, and a return of capital to the shareholder.
Some years ago, I trained and completed the New York marathon. Though distance running is portrayed as being very solitary, successful training was easiest when you ran with a partner. The same is true for successful investing. Don't let the short-term economic stats worry you, find yourself some decent businesses to partner with for the long run.
Disclaimer: Either I, my family, or clients own a current position in the securities mentioned in this post.
It is easy to take a dim view of equity markets when we read today's economic report showing US GDP slowing to a lethargic 1.3% pace for the first quarter, well below the expectations of most economists at 1.7%.
It's a good time to remind people of what I view as truism, the economy per se has nothing to do with the stock market, the biggest factor is what price you pay and what level of profitability you are attaching yourself to. You will find I refer to this truism quite frequently, most recently here.
It's easy to get bogged down in the noise, to get spooked by the media's fear-mongering. or news creation Sub-prime mortgage failures prompt curiosity much like rubber-necking a car accident. For the individuals or families, they represent a financial train-wreck and a horrible event. In aggregate however, even with one quarter of last year's originations being sub-prime, and even with defaults potentially hitting 20% rates, we are still looking at only 5% of mortgages that are afflicted. It is also easy to forget about the number of homes that are actually owned "free and clear" a figure that encompasses most of the baby boom generation.
As a value investor, I have little regard or time for most economic forecasts. Avoiding trouble (aka preserving capital) is first and foremost on my agenda. Some of my friends are far better at developing an aggregate stock market view. Let me cite a couple of them that I recommend highly. They have been kind enough to allow me to write occasional guest commentary for them.
Henry To of marketthoughts.com views markets as somewhat overbought, but remains bullish on a market that remains well-supported by private equity buyouts and insider buying as well as numerous other factors that he provides his faithful subscribers.
Another friend, David Korn of BeginInvesting.com remains bullish as well citing bullish insiders, as well as a host of evidence from sentiment indicators. I recommend both of these subscriptions as ways to improve your financial acumen from writers who are far better equipped than I to provide aggregate viewpoints.
Elsewhere in the blogosphere, I have found Interactive Investor Blog's recent post to be quite interesting.Q In a well-balanced post that cites bears such as Barry Ritholz in "The wall of worry now looks like the Great Wall of China " he also cites the very optimistic Ken Fisher, the Forbes columnist, money manager, and yes, Forbes 400 list.
Fisher's optimism is predicated on the spread between earnings yield and government bond yields in markets around the world. In what sounds like a physics argument relating to potential energy, he writes:
" At the beginning of the year the forward earnings yield was 2% higher than the 10 year government bond yield in the US and over 3% in the UK, France, Germany and Japan, yet over long periods the spread between the two has been close to zero. The theory is that when one asset pays more than another, money will flow to it and prices will rise."
Fisher continues,
“This is the beginning of a process that no-one has ever seen before,” says Ken, “In the past, when the earnings yield has been above the bond yield it’s either been in a single country… Or it happened for a very short time. This is the first time in modern history when the earnings yield has been above the bond yield all around the world.”
I am not sure that I am quite this optimistic. Nevertheless, I find it very odd that corporate balance sheets in general have failed to adequately respond to continued low rate opportunities. In a recent screen of S&P 500 non-financial names that I did, fully 30% of the companies had cash plus cash equivalents in excess of total debt. A year ago, the result was similar at about one-third. Looking at all North American companies covered by Reuters, there were 4,334 companies that passed this very far from robust screen. Financial leverage is only appropriate for companies that generate returns on investment above the cost of debt and can do so through cyclical ebbs and flows. Like the fellow who has discovered a hammer and thinks the world is covered in nails, financial engineering by blindly buying back stock willy-nilly can be a prescription for disaster.
Bottom-line, don't let economic aggregate numbers influence your investment thinking. The upside to any turbulence created by such releases is that fear or conversely, bravado creates opportunities.
In looking back at a week of earnings releases, (and remember it is only looking forward that makes you money) I am gratified by results at companies we hold such as 3M (MMM), Aetna (AET) , Harman (HAR), NCR (NCR), National Instruments (NATI), Microsoft (MSFT).
What a strange hodgepodge of businesses, you may think, but several characteristics define them...an attention to return on invested capital, a discipline in running the franchise, and a return of capital to the shareholder.
Some years ago, I trained and completed the New York marathon. Though distance running is portrayed as being very solitary, successful training was easiest when you ran with a partner. The same is true for successful investing. Don't let the short-term economic stats worry you, find yourself some decent businesses to partner with for the long run.
Disclaimer: Either I, my family, or clients own a current position in the securities mentioned in this post.
District Court Invalidates Merck's Formulation Patent on Pepcid Complete, Relying on KSR v. Teleflex
Aaron Barkoff
In an opinion released Tuesday, Judge William H. Pauley III of the U.S. District Court for the Southern District of New York ruled that Merck's patent on the formulation for Pepcid Complete is invalid as obvious, clearing the way for Perrigo Co. to sell its own generic version of the medication. The decision is one of the first pharmaceutical patent decisions to rely on and quote extensively from the Supreme Court's April 30 decision in KSR v. Teleflex.
The patent-in-suit was Merck's U.S. Patent No. 5,817,340. Claim 1 of the '340 patent recites a solid oral dosage form comprising impermeably coated famotidine granules and aluminum hydroxide or magnesium hydroxide. Pepcid Complete comprises coated famotidine granules (to inhibit stomach acid secretion) and magnesium hydroxide (to neutralize stomach acid already present). The coating on the famotidine granules is important; without it, magnesium hydroxide would cause famotidine to degrade upon contact. Additionally, the coating masks the bitter taste of famotidine.
According to Judge Pauley's opinion, two prior art references, "Davis" and "Wolfe," had previously taught the use of famotidine with magnesium hydroxide in a pharmaceutical composition. Moreover, according to the opinion, two prior art patents, the '072 and '114 patents, taught coating of famotidine granules in order to mask famotidine's bitter taste.
Judge Pauley began his analysis by referring to the "teaching, suggestion, or motivation" test as follows: "Until recently, the Federal Circuit had employed an additional test for determining the obviousness of combining prior art references." Then, after reviewing the scope and content of the prior art, he stated: "Under KSR, 'the combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results.' The '340 patent does no more than combine the predictable results of Davis and Wolfe with the predictable results of the '072 and '114 patents."
Judge Pauley went on to imply that even pre-KSR, he would have found the '340 patent invalid as obvious, since one of skill in the art "would have been motivated to use impermeable coating to improve the palatability of a chewable tablet comprised of coated famotidine and antacids." Nonetheless, the decision is still informative of how district courts are applying KSR to pharmaceutical formulation patents.
Ortho-McNeil, a unit of Johnson & Johnson, markets Pepcid Complete in partnership with Merck. Pepcid Complete is an over-the-counter product intended for the treatment of heartburn, with annual retail sales of about $90 million. Perrigo reportedly plans to begin selling its generic version sometime next year, and expects to have 180-day exclusivity when it does.
In an opinion released Tuesday, Judge William H. Pauley III of the U.S. District Court for the Southern District of New York ruled that Merck's patent on the formulation for Pepcid Complete is invalid as obvious, clearing the way for Perrigo Co. to sell its own generic version of the medication. The decision is one of the first pharmaceutical patent decisions to rely on and quote extensively from the Supreme Court's April 30 decision in KSR v. Teleflex.
The patent-in-suit was Merck's U.S. Patent No. 5,817,340. Claim 1 of the '340 patent recites a solid oral dosage form comprising impermeably coated famotidine granules and aluminum hydroxide or magnesium hydroxide. Pepcid Complete comprises coated famotidine granules (to inhibit stomach acid secretion) and magnesium hydroxide (to neutralize stomach acid already present). The coating on the famotidine granules is important; without it, magnesium hydroxide would cause famotidine to degrade upon contact. Additionally, the coating masks the bitter taste of famotidine.
According to Judge Pauley's opinion, two prior art references, "Davis" and "Wolfe," had previously taught the use of famotidine with magnesium hydroxide in a pharmaceutical composition. Moreover, according to the opinion, two prior art patents, the '072 and '114 patents, taught coating of famotidine granules in order to mask famotidine's bitter taste.
Judge Pauley began his analysis by referring to the "teaching, suggestion, or motivation" test as follows: "Until recently, the Federal Circuit had employed an additional test for determining the obviousness of combining prior art references." Then, after reviewing the scope and content of the prior art, he stated: "Under KSR, 'the combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results.' The '340 patent does no more than combine the predictable results of Davis and Wolfe with the predictable results of the '072 and '114 patents."
Judge Pauley went on to imply that even pre-KSR, he would have found the '340 patent invalid as obvious, since one of skill in the art "would have been motivated to use impermeable coating to improve the palatability of a chewable tablet comprised of coated famotidine and antacids." Nonetheless, the decision is still informative of how district courts are applying KSR to pharmaceutical formulation patents.
Ortho-McNeil, a unit of Johnson & Johnson, markets Pepcid Complete in partnership with Merck. Pepcid Complete is an over-the-counter product intended for the treatment of heartburn, with annual retail sales of about $90 million. Perrigo reportedly plans to begin selling its generic version sometime next year, and expects to have 180-day exclusivity when it does.
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