A touch of reality

I mentioned that Gilead were sold recently – price has been weakening while people try and assess relative values of CV19 therapies, and theirs is somewhat expensive.

What caught my eye is that the EU has pre ordered a huge amount of vaccine. No company was mentioned but what is the betting that Glaxo/Sanofi are the front runner. The vaccine league table for 2020 has them first and third. Anyway I could not see much harm in buying a holding in Glaxo – I’ve owned it in the past – no longer a growth story, but a 5% dividend yield plus the prospect of huge vaccine demand – whether their own formulation or stuff made under licence – grabbed my interest.

My semiconductor stocks are doing well, especially AMD that were only bought recently. One reason is that Intel has run into a few problems – just at the wrong time – demand is strong. Intel has been trading on a low multiple. plus a 2.7% dividend yield, which made the stock look cheap bearing in mind that there is plenty of free cash flow available to correct manufacturing problems and move forward. So I bought a holding in Intel. Clearly their management see the stock as cheap too, because within a few hours of my purchase they announced an accelerated buy back of about 5% of their equity (part of a larger programme to buy back about 10% with 3.9% already done). The news of manufacturing delays is already out there, so I guess that the management are not expecting any further bad news !

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