Long time GuruFocus columnist Vitaliy Katsenelson appeared on Yahoo! Finance today and talked extensively on value investing.
Vitaliy Katsenelson is Director of Research at Investment Management Associates and teaches at the University of Colorado. To read more of his articles visit www.ContrarianEdge.com. His book Active Value Investing was published by John Wiley & Sons in September 2007.
Big Pharma: One reason the fund manager likes Pfizer is because its problems are so well known - poor stock performance, political risk, patent expirations and a bad pipeline. Despite spending billions on R&D (and Wyeth last year), it's as if the market believes Pfizer is never going to produce another blockbuster drug - ever, Katsenelson quips. With over 100 drugs in the pipeline, the potential for an upside surprise is great, he says. In the meantime, Pfizer pays a 4% dividend yield, making it "the perfect stock for this economy," he says, suggesting Johnson & Johnson and GlaxoSmithKline have similar characteristics.
Mobile Giant: Often overlooked by U.S. investors - and chastised as plodding by those who do - Vodafone is the world's largest mobile operator by sales. The firm just announced strong fiscal third quarter results and raised its guidance. Vodafone's 45% stake in Verizon Wireless is key to Katsenelson's bullish thesis; he believes will soon revive its dividend payments to Vodafone and majority owner Verizon. Meanwhile, Vodafone pays a 7% dividend yield; like Pfizer, owning Vodafone is like owning a "bond with a call option," he says.
Vitaliy Katsenelson is Director of Research at Investment Management Associates and teaches at the University of Colorado. To read more of his articles visit www.ContrarianEdge.com. His book Active Value Investing was published by John Wiley & Sons in September 2007.
