The new edition of The Conservative Investor Digest has been released. The company I covered likely has the best annual returns of any company I’ll ever cover, having delivered 35% annual returns since 1994. It is an incredibly strong pharmaceutical company that has quadrupled profits since 2011, and that has been the typical experience of what the company has been doing for shareholders during the last 21 years. It also a famous significant shareholder if you follow some of the niche players in the value investing crowd.
The product pipeline has the company targeting sales growth in the 15% to 20% range over the next five years, and it is also the low-cost producer in the pharmaceutical development industry. That is an anomaly–usually, low-cost producers are these lumbering companies like Wal-Mart, Wells Fargo, or Southwestern Air that rely almost entirely on their cost benefits to drive returns. This pharmaceutical company is unique in that it is both a low-cost producer and also a company that is delivering eye-popping sales growth. It is like Gilead Sciences, except with rock-bottom operating costs.
So I am every excited about the company I have covered this month. I am less excited about the fact that it took me an extra day to get it out to you. I hope you will pardon my tardiness, as I found myself in a weird set of circumstances. I was on a bike ride about fifteen miles from town when I found myself getting a flat tire as I crossed through some glass while passing an abandoned junk yard next to some farm that had some chickens coming my way.
It took me about three hours to figure out the coordinates of my location as my internet was down and I was at least a five-mile walk from a town reference point. I have newfound respect for rural dwellers that make peace with poor internet connections and have to give directions such as “When you get to the horses, take a left.” Yesterday ended up being a scratched day where my only notable accomplishment was arriving home.
I continue to be amazed at how much money you can make if you apply the same standards you apply to the best of the large-cap companies and then find small or mid-size companies that share the same characteristics. The pharma-company covered this month is a billion-dollar operation that has managed to achieve lower costs than Johnson & Johnson, Abbvie, and Novartis. That is a 3G level of discipline, and it has served shareholders quite well since 1994.
If you want to just by the plain third edition, you can do so by clicking here: The Conservative Investor Digest (Third Edition).
If you want to become a subscriber, you can do so here. And as always, thank you for economic support. It keeps the blog rolling–I thought for sure I would have run out of things to say and quit writing after four years, but your continued support keeps me going. And it an enjoyable personal challenge to come up with twelve companies per year that have the characteristics that say, “Of course this firm is going to trounce the S&P 500 over the coming decade.” Finding companies with twenty-one year histories of 35% annual returns isn’t something I’m sure I could do if I only kept my writing to Seeking Alpha and never expanded.