February 13, 2024

The Temptation of Cheap Pharma Stocks

The world of major pharmaceutical stocks can be split into two camps: winners and laggards.

Eli Lilly (LLY) is a clear winner, with its successful roll-outs of new treatments led by the immense promise of weight-control drugs like Mounjaro and Zepbound. Lilly’s shares have surged 545% (up 5.5x) in the past five years and are increasingly mentioned as a replacement for Tesla in the “Magnificent Seven.” The shares trade at 47x estimated 2024 EBITDA.

Merck (MRK) is a modest winner. Its shares have climbed about 65% over the past five years, helped by its powerful Keytruda franchise, and trade at 11.7x estimated 2024 EBITDA.

Bristol-Myers Squibb (BMY), whose share price is 4% lower than five years ago, is struggling with upcoming “patent cliffs” in which profits for currently on-patent treatments, notably Eliquis and Opdivo, fall sharply once their patent protection ends. Bristol’s shares trade at a modest 7.3x estimated 2024 EBITDA.

Pfizer (PFE) is a former pandemic hero but today sits comfortably in the “laggard” camp, with its share price down 35% in the past five years. Its shares trade at a modest 8.8x EBITDA – above the BMY multiple due to an incrementally better new product pipeline and some dilution from its recent acquisition of Seagen.

We’re tempted by Bristol-Myers shares due to their cheap valuation and satisfying 4.8% dividend yield. But, we hesitate on two counts. First, we aren’t pharmaceuticals or patent experts, so we have little insight into the reasonableness of estimates on the ultimate profitability of its current and future portfolio of treatments. Some pharma companies, including AbbVie (ABBV), have been exceptionally successful in extending the patent protection on their treatments – can Bristol match this performance? Will the treatments from its three recent acquisitions turn out to be huge profit-generators? There are many sources of revenue pressure, including ever-changing yet always tightening government pricing policies, that make revenue projections more like revenue guesses.

Second, the valuation is probably a bit of an illusion. Consensus estimates suggest that Bristol will generate $46 billion in revenues and $18.7 billion in EBITDA in 2024 and carry net debt of about $32 billion. But the deals for Karuna, Mirati and RayzeBio total over $22 billion in net debt but will add almost no earnings. So, the otherwise stated 7.1x multiple increases to 8.3x. Or, one could look at the deals as bunched-up research and development spending. If the $22 billion of acquisition spending is thought of as the equivalent of 10 years of R&D, thus counted as an annual $2.2 billion expense, the implied EBITDA multiple would increase to 8.0x. Either way, the adjusted multiple isn’t particularly high, but it removes some of the appeal and margin for error. Bristol’s capital structure isn’t overly pressured, so it could readily make even more acquisitions. Another $18 billion in deals adds another valuation multiple point. Once that multiple crosses Merck’s valuation, the comparative analysis becomes unwieldy.

We’ve had mixed success with pharma stocks, largely due to the first problem (lack of expertise). But once the valuation becomes immensely compelling and we are “comfortable enough” with the fundamentals, we could overcome our hesitancy and jump on one of the laggards.

Unrelated Side Note:

We see that the Atlanta Federal Reserve Bank’s GDPNow forecast is calling for first-quarter GDP growth of 3.4%. This is two percentage points faster than the Blue Chip consensus comprising estimates by top economists. The Atlanta Fed’s forecast is “constructed by aggregating statistical model forecasts of 13 subcomponents that comprise GDP.”

We suspect that one reason why bond yields have lifted is the strength of the GDPNow data and the inputs that drive it. And, a 3.4% GDP would be remarkably strong when so many economists are yet again calling for a hard landing. We are thankfully not in the predictions business.

Share prices in the table and discussion below reflect Monday, February 12 closing prices. Please note that prices in the discussion below are based on mid-day February 12 prices.

Note to new subscribers: You can find additional color on past earnings reports and other news on recommended companies in prior editions and weekly updates of the Cabot Value Investor on the Cabot website.

Send questions and comments to Bruce@CabotWealth.com.

This Week’s Portfolio Changes
Sensata Technologies (ST) – Moving the shares from Hold to Sell.

Last Week’s Portfolio Changes
New Buy: Worthington Enterprises (WOR)

Upcoming Earnings Reports
Tuesday, February 13: Allison Transmission (ALSN)
Wednesday, February 14: Barrick Gold (GOLD)
Wednesday, February 14: Cisco Systems (CSCO)
Wednesday, February 14: CNH Industrial (CNHI)
Thursday, March 7: Aviva plc (AVVIY)
Friday, March 22: Worthington Enterprises (WOR)

Growth/Income Portfolio

Cisco Systems (CSCO) is facing revenue pressure as customers migrate to the cloud and thus need less of Cisco’s equipment and one-stop-shop services. Cisco’s prospects are starting to improve under a relatively new CEO, who is shifting Cisco toward a software and subscription model and is rolling out new products, helped by its strong reputation and entrenched position within its customers’ infrastructure. The company is highly profitable and generates vast cash flow. Its announced deal for Splunk will drain most of its cash hoard but we see this as being replenished relatively quickly.

European regulators are scheduled to decide by March 13 whether to approve Cisco’s pending acquisition of Splunk. Outcomes of the process include approval, approval with remedies, denial or further/full-scale investigation. We have no insight into the odds and type of approval that will be forthcoming. Our very rough estimate is that the deal will be approved with some reasonable remedies required.

Cisco reports on Wednesday, February 14 with the consensus earnings estimate at $0.84/share. We anticipate more color on reports that it plans to cut thousands of jobs to boost its efficiency.

CSCO shares rose 1% in the past week and have 32% upside to our 66 price target. Based on 2024 estimates, unadjusted for the Splunk acquisition, the valuation is reasonably attractive at 9.3x EV/EBITDA and 12.7x earnings per share. BUY

Comcast Corporation (CMCSA) – Comcast is one of the world’s largest media and entertainment companies. Its properties include Comcast cable television, NBCUniversal (movie studios, theme parks, NBC, Telemundo and Peacock), and Sky media. The Roberts family holds a near-controlling stake in Comcast. Comcast shares have tumbled due to worries about cyclical and secular declines in advertising revenues and a secular decline in cable subscriptions as consumers shift toward streaming services, as well as rising programming costs and incremental competitive pressure as phone companies upgrade their fiber networks.

However, Comcast is a well-run, solidly profitable and stable company that will likely continue to successfully fend off intense competition while increasing its revenues and profits, as it has for decades. The company generates immense free cash flow which is more than enough to support its reasonable debt level, generous dividend and sizeable share buybacks.

Disney, Warner Bros and Fox announced a deal to create a new sports streaming service. Scheduled to launch in fall 2024, the service will apparently include in a one-stop-shop app all of the games/events – like NFL, NHL, WNBA, MLB, Formula 1, PGA, Wimbledon, etc. – that the members already provide on their networks. Pricing is likely to be around $40-50/month.

Comcast, Paramount, Amazon and Apple, among others, are not (yet) included in the deal, so fans will still need to watch NBC, CBS and other networks to find many games/events.

This deal was a surprise to everyone, including the NFL, and its implications are difficult to tease out given the rapidly changing cable/broadcast/streaming shift underway. At this early stage, there is no accurate way to gauge how much of a positive or negative this deal is for Comcast. One issue is that anything that siphons off regular cable customers is a negative. Another negative is if Comcast feels the need to make some kind of large acquisition or deal to capture more sports rights.

Comcast shares fell 5% in the past week, largely on the sports streaming app news, and have 8% upside to our 46 price target. HOLD

Philip Morris International (PM) – Based in Connecticut, Philip Morris owns the global non-U.S. rights to sell Marlboro cigarettes, the world’s best-selling cigarette brand. Cigarettes comprise about 65% of PMI’s revenues. The balance of its revenues is produced by smoke-free tobacco products. The cigarette franchise produces steady revenues and profits while its smoke-free products are profitable and growing quickly. The upcoming full launch of IQOS products in the United States, a wider launch of the IQOS ILUMA product and the recent $14 billion acquisition of Swedish Match should help drive new growth.

The company is highly profitable, generates strong free cash flow and carries only modestly elevated debt (at about 3.2x EBITDA) which it will whittle lower over the next few years. The share valuation at about 13.5x EBITDA and 15.6x per-share earnings is too low in our view. Primary risks include an acceleration of volume declines and/or deteriorating pricing, higher excise taxes, new regulatory or legal issues, slowing adoption of its new products, and higher marketing costs. A strong U.S. dollar will weigh on reported results. While unlikely, Philip Morris could acquire Altria, thus re-uniting the global Marlboro franchise.

On February 8, Philip Morris Intl reported a reasonable quarter, with adjusted earnings of $1.36/share which increased 12% but fell 6% shy of the consensus estimate of $1.45/share.

Revenues grew 11% (or, 8% excluding the Swedish Match acquisition, currencies and other inorganic changes) and were in line with estimates. Cigarette and heated tobacco unit volumes fell (0.5)% but were better than the (1.9)% industry decline and much better than the (5)% or more decline in the United States (which is outside of PMI’s market). PMI’s cigarette/HTU products gained incremental market share. Impressively, the company increased prices by 9% for the full year – this pricing power is key to the PMI story. Revenue and margin growth, however small, are key to investor perceptions that the company won’t fade away. IQOS growth was strong with 1.2 million new users added in the quarter.

While revenues were healthy, the operating margin fell by 2.8 percentage points. Higher pricing was more than offset by higher manufacturing and overhead costs. Excluding currency changes and the effects of acquisitions, PMI said its margin fell only 0.1 percentage point. However, the margin includes a dizzying number of adjustments which make clean comparisons murky despite the detail provided.

PMI is making progress with its transition to smoke-free products, helped considerably by its acquisition of Swedish Match. The IQOS product revenues now exceed Marlboro revenues, while 40% of gross profits are produced by smoke-free products.

Swedish Match continues to be a bit of a gem, as revenues grew 20% (organic) for this newly acquired business, and as its profits are ahead of PMI’s targets.

Guidance for 2024 and for the 2024-2026 period were for more of the same: positive shipment volume growth, 6-8% revenue growth, 8-10% operating profit growth. However, the guidance for 2024 was incrementally below current estimates.

PMI’s shares fell 2% in the past week and have 34% upside to our 120 price target. The shares offer an attractive 5.8% dividend yield. BUY

Buy Low Opportunities Portfolio

Allison Transmission Holdings, Inc. (ALSN) – Allison Transmission is a midcap manufacturer of vehicle transmissions. While many investors view this company as a low-margin producer of car and light truck transmissions that is destined for obscurity in an electric vehicle world, Allison actually produces no car or light truck transmissions. Rather, it focuses on the school bus and Class 6-8 heavy-duty truck categories, where it holds an 80% market share. Its EBITDA margin is sharply higher than its competitors and on par with many specialty manufacturers. And, it is a leading producer and innovator in electric axles which all electric trucks will require. The company generates considerable free cash flow and has a low-debt balance sheet. Its capable leadership team keeps its shareholders in mind, as the company has reduced its share count by 38% in the past five years.

Allison reports earnings on Tuesday, Feb 13, with the consensus earnings estimate at $1.45/share.

ALSN shares rose 2% in the past week and are 6% above our $59 price target. With the company reporting earnings shortly, we are reluctant to change our rating. The company is well-run and the shares remain arguably inexpensive at 9.0x per share earnings and 7.1x EBITDA, barring an unexpected collapse in fundamentals. For now, we are keeping our rating at HOLD.

Aviva, plc (AVVIY), based in London, is a major European company specializing in life insurance, savings and investment management products. Amanda Blanc, hired as CEO in July 2020, is revitalizing Aviva’s core U.K., Ireland and Canada operations following her divestiture of other global businesses. The company now has excess capital which it is returning to shareholders as likely hefty dividends following a sizeable share repurchase program. While activist investor Cevian Capital has closed out its previous 5.2% stake, highly regarded value investor Dodge & Cox now holds a 5.0% stake, providing a valuable imprimatur and as well as ongoing pressure on the company to maintain shareholder-friendly actions.

Aviva’s proposed acquisition of AIG’s life insurance business is being investigated by Britain’s antitrust unit. The initial phase of the investigation is likely to be completed by early April. We see little material effect on our Aviva thesis either way.

Aviva shares were flat in the past week and have 31% upside to our 14 price target. Based on management’s guidance for the 2023 full-year dividend, which we believe is a sustainable base level, the shares offer a generous 7.9% yield. We anticipate a dividend increase for 2024. On a combined basis, the dividend and buybacks offer more than a 10% “shareholder yield” to investors. BUY

Barrick Gold (GOLD), based in Toronto, is one of the world’s largest and highest-quality gold mining companies. About 50% of its production comes from North America, with the balance from Africa/Middle East (32%) and Latin America/Asia Pacific (18%). Barrick will continue to improve its operating performance (led by its highly capable CEO), generate strong free cash flow at current gold prices, and return much of that free cash flow to investors while making minor but sensible acquisitions. Also, Barrick shares offer optionality – if the unusual economic and fiscal conditions drive up the price of gold, Barrick’s shares will rise with it. Given their attractive valuation, the shares don’t need this second (optionality) point to work – it offers extra upside. Barrick’s balance sheet has nearly zero debt net of cash. Major risks include the possibility of a decline in gold prices, production problems at its mines, a major acquisition and/or an expropriation of one or more of its mines.

Barrick reports earnings on Wednesday, February 14, with the consensus earnings estimate at $0.22/share.

One of Barrick’s largest mines, the Loulo-Gounkoto mine in Mali, could be increasingly vulnerable to disruption or expropriation. Armed groups have gained control of nations across the Sahel region of Africa, including Mali. As such, Barrick’s mine (at the western edge of Mali) would seem to be an attractive target for militants seeking recurring sources of cash – a literal “gold mine.” The Mali mine produces about 14% of Barrick’s output. Given this risk and Barrick’s already-blowing fundamental headwinds (weak production, rising costs), we are considering swapping out Barrick for another, better-positioned gold company. We will wait for the earnings report to make a decision on this issue.

Over the past week, commodity gold fell fractionally to $2,028/ounce. Gold seems to be holding its $2,000+ pricing. Foreign central banks have stepped up their buying, which is offsetting pressure from incrementally higher interest rates in the United States. But, financial investors including hedge funds continue to have low exposure to gold, based on government reports, which could be a bullish indicator.

Our view on gold prices avoids most of these technicals and is based on what we believe is a structural change to inflation levels (no longer at near zero). These changes include war, government spending, crime, oil prices and past-the-peak fading of the benefits of global free trade, in addition to a tight labor market. Aggregate inflation statistics include subcomponents that show starkly different pictures of pricing trends, and these trends can and have changed from month to month. Despite the favorable broad trend, there remains a reasonably good chance that inflation could remain above a 3% pace indefinitely. This would imply permanent 4-6% interest rates. Recent comments by the Fed suggest that rate cuts are increasingly unlikely in the near term.

The 10-year Treasury yield was unchanged at 4.18%. The U.S. Dollar Index (the dollar and gold usually move in opposite directions) was unchanged at 104.24.

Investors and commentators offer a wide range of outlooks for the economy, interest rates and inflation. We have our views but hold these as more of a general framework than a high-conviction posture. Investing in gold-related equities is a long-term decision – investors shouldn’t allow near-term weakness to deter their resolve.

Barrick shares fell 3% in the past week, partly due to rising interest rates. The shares remain depressed despite gold prices above the $1,800 - $2,000 range, indicating that investors have no confidence in gold prices and little confidence in the company’s ability to generate higher cash flow. Barrick shares have 83% upside to our 27 price target. BUY

Citigroup (C) – Citi is one of the world’s largest banks, with over $2.4 trillion in assets. The bank’s weak compliance and risk-management culture led to Citi’s disastrous and humiliating experience in the 2009 global financial crisis, which required an enormous government bailout. The successor CEO, Michael Corbat, navigated the bank through the post-crisis period to a position of reasonable stability. Unfinished, though, is the project to restore Citi to a highly profitable banking company, which is the task of new CEO Jane Fraser. Investors have lost hope in Citigroup, creating an impressive bargain.

There was no significant company-specific news in the past week.

Citi shares were flat in the past week and have 57% upside to our 85 price target. The shares remain attractive as they trade at about 63% of tangible book value of $86.19. The dividend offers investors a 3.9% yield.

Citi’s dividend yield has dipped below the 10-year U.S. Treasury yield. Nevertheless, Citi shares offer considerably more upside price potential than a Treasury bond. Clearly, the Citi share price and dividend payout carry considerably more risk than a Treasury bond, but at the current valuation, Citi shares would seem to have a remarkably better risk/return trade-off. BUY

CNH Industrial (CNHI) – This company is a major producer of agriculture (80% of sales) and construction (20% of sales) equipment and is the #2 ag equipment producer in North America (behind Deere). Its shares have slid from their peak and now trade essentially unchanged over the past 20 years. While investors see an average cyclical company at the cusp of a downturn, with a complicated history and share structure, we see a high-quality and financially strong company that is improving its business prospects and is simplifying itself yet whose shares are trading at a highly discounted price. See our November 30 Alert and the December 5 Monthly letter for more color on our thesis.

The company reports earnings on Wednesday, February 14, with the consensus earnings estimate at $0.42/share.

CNH’s shares rose 1% in the past week and have 22% upside to our 15 price target. The 3.2% dividend yield offers a worthwhile interim cash return. BUY

Gates Industrial Corp, plc (GTES) – Gates is a specialized producer of industrial drive belts and tubing. While this niche might sound unimpressive, Gates has become a leading global manufacturer by producing premium and innovative products. Its customers depend on heavy-duty vehicles, robots, production and warehouse machines and other equipment to operate without fail, so the belts and hydraulic tubing that power these must be exceptionally reliable. Few buyers would balk at a reasonable price premium on a small-priced part from Gates if it means their million-dollar equipment keeps running. Even in automobiles, which comprise roughly 43% of its revenues, Gates’ belts are nearly industry-standard for their reliability and value. Helping provide revenue stability, over 60% of its sales are for replacements. Gates is well-positioned to prosper in an electric vehicle world, as its average content per EV, which require water pumps and other thermal management components for the battery and inverters, is likely to be considerably higher than its average content per gas-powered vehicle.

The company produces wide EBITDA margins, has a reasonable debt balance and generates considerable free cash flow. The management is high-quality. In 2014, private equity firm Blackstone acquired Gates and significantly improved its product line-up and quality, operating efficiency, culture and financial performance. Gates completed its IPO in 2018. Following several sell-downs, Blackstone has a 37% stake today.

On February 8, the company reported a decent quarter, but 2024 revenue guidance was shy of analyst estimates. Adjusted earnings of $0.39/share rose 56% and were 39% above the consensus estimate of $0.28/share. Revenues fell 5% excluding currency effects but were in line with estimates. Guidance for 2024 is for basically a repeat of 2023 for revenues, margins and free cash flow.

Fourth-quarter revenues were weak as end-market demand has generally been sluggish but steady. Adjusted EBITDA of $186 million increased 12% and was 10% above estimates. The EBITDA margin expanded by 2.9 percentage points, as better execution helped boost margins in both segments.

Gates continues to perform well, with steady-enough revenues bolstered by expanding margins and healthy free cash flow ($165 million in 4Q and $410 million for 2023) that is being used intelligently to repay debt and repurchase shares. One risk is that management decides to deploy its renewed balance sheet strength into an acquisition – we would hope that any deal would be at an attractive price and be readily integrated into Gates’ existing operations. The company’s new $100 million (3% of market cap) share buyback program suggests that management will lean toward returning cash to shareholders.

Gates’ balance sheet continues to improve. Net debt declined by $140 million in the quarter and by $160 million for the full year, despite Gates repurchasing $250 million of its shares. The share count is 6% below a year ago.

Gates shares fell 3% in the past week and have 26% upside to our 16 price target. BUY

NOV, Inc (NOV) – This high-quality, mid-cap company, formerly named National Oilwell Varco, builds drilling rigs and produces a wide range of gear, aftermarket parts and related services for efficiently drilling and completing wells, producing oil and natural gas, constructing wind towers and kitting drillships. About 64% of its revenues are generated outside of the United States. Its emphasis on proprietary technologies makes it a leader in both hardware, software and digital innovations, while strong economies of scale in manufacturing and distribution as well as research and development further boost its competitive edge. The company’s large installed base helps stabilize its revenues through recurring sales of replacement parts and related services.

We see the consensus view as overly pessimistic, given the company’s strong position in an industry with improving conditions, backed by capable company leadership and a conservative balance sheet.

There was no significant company-specific news in the past week.

The price of West Texas Intermediate (WTI) crude oil jumped 7% to $76.94/barrel. While oil markets remain well-supplied, traders seem to be factoring in additional risk from tensions in the Middle East.

Outcomes in wars are unpredictable. The potential for sharp oil price volatility is higher with the increasingly complicated game of shifting geopolitical and economic alignments. Geopolitical conditions in the Middle East continue to inch closer to a hot regional conflict, which would almost certainly drive oil prices to at least $150/barrel.

The price of Henry Hub natural gas continued to slide, down 11% in the past week to $1.83/mmBtu (million BTU). President Biden’s plan to pause new permits for the export of liquified natural gas appears to be the primary reason. If implemented, the pause would trap more gas in the domestic market thus pushing prices lower. Barring a surprising deep freeze, cold weather will likely play a diminishing role in setting gas prices. Natural gas prices are now below what might be considered a normal floor price of around $2.

NOV shares rose 2% in the past week and have 41% upside to our 25 price target. The dividend produces a reasonable 1.1% dividend yield. BUY

Sensata Technologies (ST) is a $3.8 billion (revenues) producer of nearly 47,000 highly engineered sensors used by automotive (60% of revenues), heavy vehicle, industrial and aerospace customers. About two-thirds of its revenues are generated outside of the United States, with China producing about 21%.

On February 6, Sensata reported another weak quarter compared to a year ago and consensus estimates and provided weak first-quarter 2024 guidance. The management is pursuing revenue growth, particularly in “electrification” products, even as the demand outlook for these products isn’t as bright as it once was. Just as bad, management seems less interested in profit growth. Sensata’s adjusted EBITDA expenses (revenue less adjusted EBITDA) increased in the quarter and for the year despite the dismal revenue performance. Pressing the point further: since 2021, revenues have increased a cumulative 6% while expenses have increased a cumulative 9%. This is the opposite of what a company should be producing.

Part of management’s weakness is its enthusiastic pursuit of three megatrends. Too many times, managements pursue “trends” that almost by definition fade relatively quickly. Trend pursuers over-pay on acquisitions to ride the trend. Sensata’s management is now backing away from its failed, merger-driven megatrends strategy and said it is ready to offload outright one of its previously touted megatrend businesses (ironically named “Insights”).

While debt is now approaching a respectable level, we wonder if management will use its balance sheet to once again make ill-advised acquisitions. Our skepticism on its acquisition program is illustrated by this: from 2021 to 2023, Sensata spent $1.4 billion on acquisitions, yet its EBITDA has actually fallen (by $22 million) over this period. Had the company simply invested this $1.4 billion in short-term Treasuries at 4%, it would have generated $56 million in incremental profits. That $1.4 billion in deals equals 28% of the company’s current market value. That’s a lot of money to spend on unproductive acquisitions.

We appreciate the company’s nod to shareholders by repurchasing its shares and paying down debt. But even here we are skeptical: the share count is creeping back up due to new stock options.

In the quarter, revenues fell 2% but were 1% above estimates. Adjusted earnings of $0.81/share fell 16% and were 6% below estimates. Adjusted EBITDA of $218 million fell 11% but was in line with estimates.

Not all stocks that appear undervalued actually are. Sensata is one of these. Its franchise appeared valuable and maybe it is. But management has executed poorly and has the wrong strategic priorities. We appreciate, to some extent, the macro headwinds that the company faces. But, in the end, we were clearly wrong on our Sensata thesis.

While the company may eventually turn itself around, and an exit from its Insights operations may provide a brief lift, we have lost confidence in the management team and its strategy. Perhaps an activist investor or a management change will reverse Sensata’s mediocrity. But, we aren’t interested in waiting around while management burns shareholder capital. As such, we are moving the shares to SELL.

Worthington Enterprises (WOR) – Following the split-up of Worthington Industries late last year, “Enterprises” focuses on producing specialized building products (42% of sales) and consumer products (48%). The value of these operations was previously obscured by the market’s perception that the original Worthington Industries was primarily a steel processor. While the market sees an average company with a mix of only partly related products, we see a high-quality company with strong positions in valuable and profitable niches, backed by capable management and a solid balance sheet.

There was no significant company-specific news in the past week.

WOR shares rose 9% in the past week and have 16% upside to our 73 price target. The dividend produces a reasonable 1.0% dividend yield. BUY

Current price is yesterday’s mid-day price.

Strong Buy – This stock offers an unusually favorable risk/reward trade-off, often one that has been rated as a Buy yet the market has sold aggressively for temporary reasons. We recommend adding to existing positions.
Buy – This stock is worth buying.
Hold – The shares are worth keeping but the risk/return trade-off is not favorable enough for more buying nor unfavorable enough to warrant selling.
Sell – This stock is approaching or has reached our price target, its value has become permanently impaired or changes in its risk or other traits warrant a sale.

Note for stock table: For stocks rated Sell, the current price is the sell date price.

Current price is yesterday’s mid-day price.
CSCO: Earnings estimates are for calendar years.

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