What Did You Buy Today?

[crimsonghost747]

(03-12-2021, 01:19 PM)ken-do-nim Wrote:

(03-12-2021, 01:17 PM)crimsonghost747 Wrote: Initiated a position in NVO.
Looks like an awesome company. All the things we love to see in our steady DGI companies with quite a bit of long-term upside. (just my view)

It's quite expensive though, I wouldn't want to start a large position at these levels but it's good to nibble a bit here and there.

I'm confused.  NVO is at $70.74.  5 years ago it was at $55.79; how do you deem it expensive?

Charts are funny that way. Let me start off by saying that I don't have a great understanding of the company's past. 
But indeed, up 25% in the past 5 years, seems pretty normal right? 
But if you pull up the 2 year chart, you'll see it's +40% in the past 2 years. That's a pretty big jump.

I personally think a P/E of close to 30 is a lot for a mature pharma company that relies on a very limited amount of drugs. And covid didn't really affect their 2020 earnings that much, so a sudden decrease in EPS doesn't explain the high P/E either. The company is good, it has it's risk. Historically all the juicy numbers I look at (revenue, eps, cash flows, debt) are trending in the right direction. But I just haven't seen the kind of movement in those numbers that I would want to see if I am paying 30x earnings.