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Value Investor
Wealth Building Opportunites for the Active Value Investor

May 28, 2020

Crista updates three portfolio stocks and has one rating change.

Today’s news:

Alexion Pharmaceuticals (ALXN) and Amgen settled a Soliris patent challenge.
Tyson Foods (TSN) goes ex-dividend tomorrow, May 29; moves from Buy to Strong Buy.
• Industry focus: investment, life insurance and annuity stocks; Voya Financial (VOYA).


Alexion Pharmaceuticals (ALXN) – Back in August 2019, I wrote, “The U.S. Patent Trial and Appeal Board (USPTAB) granted Amgen’s request for an inter partes review of Alexion’s Soliris IP protection, which was previously extended from 2021 through 2027. The decision implements a year-long process during which USPTAB will decide whether to revoke the current Soliris patent extension. This decision does not affect Alexion’s near-term revenue and profit forecast, but could potentially open Soliris up to biosimilar competition in the U.S. in 2022. Alexion additionally has Soliris patents in Japan through 2027.”

Yesterday afternoon, I learned that Amgen (AMGN) and Alexion reached a settlement, asking the USPTAB to terminate the inter partes review, to which the Board agreed. This should remove a degree of negative investor sentiment from the stock. After opening yesterday at 103 and closing at 106, ALXN rose 7.4% in after-hours trading to 114. Therefore, the stock is likely to rise today. ALXN has not traded above price resistance at 115 since August. Odds are that the stock will get stuck there for a little while, but anything is possible. I have a Hold recommendation on the stock, due to the slow earnings growth projections (it’s still a great company), and I intend to Retire ALXN from the Buy Low Opportunities Portfolio after the current run-up appears to cease. Hold.


Tyson Foods (TSN 62.75 – yield 2.7%) goes ex-dividend tomorrow, May 29. Investors who own the stock at the close of business today, May 28, will receive the next quarterly dividend, to be paid on June 15. The payout is $0.42 per share, and the annual yield is 2.7%. I know that the ex-dividend date can be a confusing concept, so I want to make this clear: If you own the stock at the close of business today, you will receive the next dividend, even if you sell the stock tomorrow.

The price chart is indicating that the stock is likely to rise past price resistance at 64 immediately, barring the impact from any sudden bad news, or a downturn in the broader market. Consequently, I’m moving TSN from Buy to a Strong Buy recommendation today. I think today is a good day for traders, growth investors and dividend investors to accumulate more shares of TSN. Very experienced option investors could consider the June 19th 62 calls. Traders take note: As the stock continues its rebound from the March stock market correction, there’s some price resistance at about 70. Strong Buy.


INDUSTRY FOCUS – During the last six months or so, I repeatedly stressed that investment, insurance and annuity stocks were extremely undervalued. Those stocks are now in the midst of run-ups. Some of these stocks have risen aggressively already, but it’s not too late to buy Voya Financial (VOYA 46.60 – yield 1.3%) and catch its run-up that just began this week. (As always, unexpected bad news or a disruption in the broader stock market could halt the run-up.) VOYA is a mid-cap stock, appropriate for aggressive growth investors and traders. There’s price resistance in the mid-50s. Strong Buy.