Supplemental
9 Aug 2021: Investment opportunities in the very expensive US stock market are rare. Regeneron Pharmaceuticals (REGN), biotechnology, has just reported (5 Aug) a +163% jump in revenue, and profit per share for the second quarter of $27.97, or non-GAAP $25.80. The latter is a price/earnings of $616.86/~4x$25.80 ~6.0. The revenue growth is mostly from the monoclonal antibody cocktail REGEN-COV, which reduces the risk for symptomatic COVID-19 infection by 81%. Without REGEN-COV growth was 22%.
4 Nov 2021: Regeneron Pharmaceuticals (REGN), Biotechnology, Investor Relations. Third quarter results:
REGEN-COV $804M, EYLEA US +12% to $1.47B, Dupixent +55% to $1.66B. Price/earnings $640/~4x$14.33 ~11.
5 Aug 2021: Moderna (MRNA) Investors: Q2 revenue $4354M versus $67M last year, dEPS $6.46 versus -$0.31 last year, net profit margin 64%, price/earnings $417.34/~4x$6.46 = 16.1.
From 10 Aug 2021: Moderna's stock price is 'ridiculous,' says BofA analyst - MarketWatch.
Stock picks for 2021
Amongst the thousands of unattractive stocks, it is a battle to come up with 10 stocks at a reasonable valuation. Most have no or low growth. The few growth stocks are extremely expensive.
With US money supply growing at 25%, a stock market investment must beat 25% at the moment. The money supply growth rate is likely to slow down. It was around 6% per year for decades. This requires revenue or profit growth plus dividend yield of more than 6%.
Stock markets are likely to collapse at some point, in which case examples of short ETFs (Exchange Traded Funds) are S&P500 2x short (SDS) and Nasdaq100 2x short (QID).
(1) Anthem (ANTM) managed Health Care
Health insurer Anthem raises 2021 profit target on upbeat quarter - Reuters.
(2) CVS Health (CVS) pharmacies.
9 Aug 2021: CVS Health (CVS) second quarter revenue grew 11.1%, but EPS stalled. The company expected an EPS of $6.06 to $6.22 for the year, which would be ~12.5% higher.
(3) The GEO Group (GEO) REIT - Healthcare Facilities.
7 Apr 2021: Suspends dividend to repay debt. Share price falls to earnings yield before impairments of $1.30/$5.84 = 22%.
(4) Ingles Markets (IMKTA) food retail.
(5) Kroger (KR) food retail.
results: revenue year to Jan 2021 +8.3% (Q4 +6.4%), adjusted EPS from $2.19 to $3.47 (Q4 $0.57 to $0.81). Revenue growth is low for money supply growth of 27%. The impact of the increase in money and stimulus cheques might still come through.
9 Aug 2021: Kroger (KR) expects year to Jan 2022 adjusted EPS $2.75 to $2.95, compared to $3.47 to Jan 2021. Unless their forecast turns out to be a big underestimate, the stock is not attractive.
(6) Sprouts Farmers Market (SFM) grocery stores.
9 Aug 2021: Sprouts Farmers Market (SFM) second quarter revenue was down -7.4%, and dEPS $0.52 compared to $0.57 last year. The growth of the last 10 years appears to be coming to an end.
(7) Tyson Foods (TSN) packaged foods & meats.
10 Jun 2021: The Tyson Foods (TSN) share price is cheap relative to the rest of the stock market, but growth is too low for the US inflation rate.
(8) Unum Group (UNM) life & health insurance.
(9) US oil (USO) WTI futures contracts.
By Tuesday 9 Feb 2021, the exchange traded fund USO has reached $38.94. The last time it was at this level was 13 April 2020 (which includes a 8 for 1 consolidation on 29 April 2020). WTI is $57.98 per barrel. On 13 April 2020 WTI was $22.36. Thus the fund increased 1x whilst the underlying oil price increased 2.6x. These exchange traded funds (ETFs) are not attractive products to invest in.
By 26 Feb, WTI reached $62. It can't rise too high or US shale producers will flood the market. Most of the gain in this fund has probably happened.
16 April 2021: With US money supply growing at 27%, inflation could push $60 oil towards $80 later in the year. Future contracts don't look attractive at the moment: Barchart.
Is USO a Good Way to Invest in Oil? - Investopedia.
(10) Walgreen Boots Alliance (WBA) pharmacies.
25 May 2021. The revenue growth and dividend yield of Walgreen Boots Alliance is too low for the rate at which the US is printing money.
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