Novartis: Big Pharma Felons Ready for a Potch (NVS)

Novartis AG (NYSE:NVS) is a Swiss-based, criminal big-pharma outfit with a rap sheet as long as its lifespan.

Ever since its incorporation in 1996, the company has been racking up fines and penalties on nearly every continent in dollar figures that are astonishing.

In the dozen years between 2003 and 2016, for example, they paid out almost $1.2 billion to various state regulators to make their illegalities and indiscretions “go away”.

French lawmakers hit them with another $400 million in penalties a year and a half ago—after South Korea stripped them of another $49 million for illegal kickbacks.

And most recently, the company agreed to a $245 million antitrust settlement in the U.S. after some shady hanky-panky with an associated generic drugmaker caught regulators’ attention.

These are garden variety, low-life criminals who strut about in expensive suits and flash their ivy Ph.Ds, but are really no different from the crack-smoking Hunter Bidens and Oprah Winfreys of the world.

Fundamentals

Let’s look at some numbers…

• The company sports a P/E of just 9.48 (and headed smaller),
• Pays an annual Dividend of 3.61%, and…
• Posts a Price to Book of 3.28.  All fine and dandy, so far.
• But Q/Q Sales and Earnings were both DOWN in the last report by -3.90% and -41.00% respectively, while…
• Institutions have unloaded 8.50% of their stake in the last three months, and…
• Company brass say recent legislation to curb the high cost of prescription pharmaceuticals will have a deep and lasting negative impact on NVS’s bottom line.

Yup, sir.  That about sums it up…

Now, the only reason we’re setting a trade on Novartis at this stage, is because investors in the company have begun to show a measure of resignation after a wild, two month gain served an overdose of soma to the bulls.

NVS shares have since spent 40 days in a cryogenic deep-freeze, typical of a major turn in fortunes.

As the chart below illustrates.

Take a look—

May the G-d of Israel be with you!

With kind regards,

Hugh L. O’Haynew

Follow @HughLOHaynew