April 19, 2012 Comments

It was a moderately negative day int eh markets. Couche-Tard went down a bit to $38.75. I threw in an order to buy back half of what I sold at $37.60 if it happens to dip down. (I sold all my shares on the big jump yesterday).

I notice eBay took a big jump today. I had only rated eBay a weak Buy /hold at the start of this year. But I did certainly have some good things to say about it in the report as well.

There was a large take-over offer in the biotech filed today with Glaxo SmithKline bidding a big premium for Human Genone Sciences (I believe it was around a 70% premium to the stock price or more). What I take from this ist aht we are seeing take over bids well above share prices. Buffett has often said over the decades that when shares are trading in the market at big discounts to what buyers will pay in acquisitions that is usually a good investment. Buffett’s ultimate calculation of value involves the outlook for free cashflow growth, how much cash a company will spit out from now to eternity. But he has suggested that the price paid by in acquisitions is a measure he has looked at as well, at least in his earlier days.

I have basically never looked at any of the big pharma stocks although it seems like a growth sector for sure. The difficulty might be to find a pharma stock that is predictable and not overly dependent on finding the cure for cancer sort of thing. It may not be an area where financial statement analysis works well.