Nov 23, 2016|
Damien Conover (Morningstar, LLY, BAYN) by The Financial Exchange
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
We're joined now by Damien Conover for Morningstar. Talk about a couple stock of this David thank you for joining us. I they mean let's talk first about Eli Lilly tough morning for the company. As one of their drugs to treat alzheimer's field. In a trial do you see this as a buying opportunity or does this concern you. Yes great question is a great buying opportunity and the reason is. You know there's a lot of other really powerful things going on at Eli Lilly they've got a great pipeline of other. Drugs and have. Higher probability of reaching a market and the alzheimer's drugs. And then beyond that they're doing major cost containment initiatives that we don't give deferment amplify the bottom line growth over the next couple years. And in our view it is a bit of an overreaction to what could've been a great drive but nevertheless was highly risky because it was going after alzheimer's disease. Which is incredibly complex and very difficult to get new drug development now they're so again. Think it's a great buying opportunity for Lilly. Yeah day and that overreaction this is a company that lost ten billion dollars in market cap. For drug that never even been on the market. Correct you know this is a drug debt I think the market was thinking this pretty close to 5050 whether or not it would reach the market. They could have handled huge potential because said the prevalence of alzheimer's disease and potentially be major the drug could've. Shifted the disease so. Big potential highly uncertain you know have a drug worked in the stock would an awful lot. The spine area event for a company like Eli Lilly's pretty unusual typically don't see this big of a swing bout because of those dynamics are seen the stock moved as much it is. Let's turn around take a little look at buyer this accompany obviously been in the news an awful lot this year about some potential merger and acquisition talk. Already this company going is this one that you are bullish or bearish on. But in the north we're very bullish on innocent Maine where I think there's a lot of concerns about. They're making an acquisition of months it took it away from some of the healthcare focus that it had been in. And beyond that there are concerns about the pipeline for Barry and when we look at the pipeline it is concerning it isn't that strong. But what's important about the health care aspect of various states do not face a lot of patent losses over the next five years. Lot of time to fill that pipeline. And the earnings potential growth between now and expect years is very strong we think it's in the close to 10% a year. That given a mall or 2017 earnings of about 11%. Think a big disconnect there and I think it's a good opportunity for investors. Looking at this company is there any concern that you have that. At the moment. It is not a US based company any concern from either a foreign exchange perspective or international trade. It's good question. You know I would see hat you know the uncertainty around international treaties between elevated post election. You know a lot. You know beer investment is with in the US I think there is a little bit of and not sit there. By having some of them that's in the US but the united teachers and increased uncertainty with bad I haven't. I don't think that is enough to offset what we think it's a good investment opportunity. Very good Damien thank you very much for joining us tonight. Damien Conover for morning start talking about Eli Lilly with a ticker LLY. Buyer with a ticker BAY. And.