Author: Andrew Keene
ABT May Cure Your Portfolio (Part 2) 11.16.2012
ABT’s dividend has always been an important part of Abbott’s investment identity. According to management, ABT expects that the combined dividend of the 2 companies will be at least equal to Abbott’s pre-separation annual dividend. And they went on to say that AbbVie will be even more focused on shareholder returns in the form of dividends, paying a larger portion of the dividend.
With the former in mind, ABT announced that they expect AbbVie to pay an annual dividend of $1.60 per share, starting with a quarterly dividend to be paid in February. Management also announced that they expected the new Abbott dividend to be $0.56 per share. This new rate will be in line with its peer group and growth prospects. The combined annual dividend rate of $2.16 for the 2 companies exceeds the current annual dividend rate of $2.04. And this increase is expected to be implemented 1 quarter earlier than in past years…just another way this deal is benefitting shareholders.
Away from the fundamentals for a moment, the options market is implying a $4.00 move either way by Jan 2013; this expirations cycle is past the date of this corporate event, but it is till relevant. This will be an interesting stock to watch, not only because it has recently tested its 200 day moving average, but also because investors have clearly liked the idea of the firm splitting up. Shares are up over 20% since the announcement, but market risks like the fiscal cliff may present an opportunity to get into ABT on the cheap; if one is compelled to do so. More to come on this story.
Part 1 here
http://www.keeneonthemarket.com/blog/1611-abt-may-cure-your-portfolio-part-1-11-14-12
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Apple & Google Pivot Points for 11.16.2012
S&P Emini Pivot Points for 11.16.2012
S&P Emini Pivot Points for 11.15.2012
AAPL & GOOG Daily Pivot Levels for 11.15.2012
ABT May Cure Your Portfolio (Part 1) 11.14.12
ABT announced the idea to split the stock on October 18th, 2011. The company plans to be split by 12/31/12. The press release said the, “Two publicly traded companies will offer shareholders distinct opportunities given unique investment identities, business profiles and attributes” and “builds on a decade of strategic and operational advancements.”
One company will be the research-based pharmaceutical firm and will focus on select specialty products with breakthrough innovation that serve patient needs in some of the most critical medical areas, such as immunology, Multiple Sclerosis, chronic kidney disease, Hepatitis C, women’s health and oncology. This company will continue to generate the majority of its revenue from developed markets. The company’s sustainable portfolio and advancing pipeline, including established biologics expertise, have the potential to deliver accelerating revenue growth in the coming years.
Then the other firm, the diversified medical products company, will be one of the largest and fastest growing investment opportunities in medical products with strong sales and ongoing earnings-per-share growth and a large, broad mix of products addressing many essential areas of health care. It will generate nearly 40 percent of its sales in high-growth emerging markets, with further expansion expected in the coming years.
AbbVie will be the drug portfolio and pipeline company, while Abbott, with nutritional products and devices, will be the other firm. More to come with this story.
Data from ABT IR
Apple & Google Pivot Points for 11.14.2012
A golden Opportunity 11.13.2012
It has been reported that the Chinese have imported more Gold from Hong Kong; further diversifying away from king dollar; more specifically, in September Chinese total imports increased by 30%. This figure is in line with historical efforts by the Chinese…rising to a total of 69.7 tons.
Another headline includes the looming fiscal cliff. Perhaps the closest thing to look at historically was how the respective markets acted during the USA debt ceiling and debt downgrade debacle. During this period of volatility, there was a clear divergence between gold and the equity markets. The current correlation coefficient is around a 0.64 (weekly bars over ten periods). Should the fiscal cliff happen tomorrow, given the aforementioned coefficient, one would expect the gold market to fall with the equity market. However, this coefficient has been anything but smooth over the years. It has flipped around from positive to negative many times over. The only thing that can be guaranteed it basically volatility.
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