Out Fox The $treet

Bristol-Myers Squibb (BMY) agreed to acquire Celgene (CELG) in a stock and cash deal valuing the later at a 51% premium from their closing price. So much to like with a deal that has an EPS accretion of 40% in the first year. The transaction is about 50% cash and 50% stock with a unique CVR worth up to $9 based on the 3 potential blockbuster drugs getting FDA approvals. Bristol-Myers should be up on this news, not down 10%. Disclosure: Long CELG. Please review the disclaimer page for more details. 

January was yet another solid month on an absolute basis, with a 3.9% gain for my Net Payout Yields portfolio, but on a relative basis the portfolio underperformed the benchmark S&P 500 that was up 4.4%. Though not unexpected as these large cap stocks will tend to slightly underperform on large up months. For the last 365 days the model continues to greatly outperform the market by outperforming during weak months. Dividend Risks As the market entered 2012, too much focus in the market was being placed on dividend yields with no concept of capital loss potential. As the dividend stocks rose into year end, this created the risk of capital losses in stocks yielding only 3-4%. Investors typically expect and want higher gains for a year. What happens when the stock drops for the year wiping out the benefit of the dividend? This highlights the benefits of a model that focuses not only on dividends but also stock buybacks. The typical stock owned in this model has 60-70% of its ...