Livewire Market’s Income series for 2022 has come to and end and we’re pleased to report that Talaria’s stock pick for the year – Novartis (SWX:NOVN) is the best performing global pick for the past 11 months.
As reported by Livewire’s Ally Selby “December 2021 was a starkly different time from where we investors find ourselves now. Back then, Omicron had just hit the press, Australia’s eastern coastline was being battered by a deluge of rain, and riskier assets (like growth stocks, cryptocurrencies and property markets) were still in vogue.”
“Incredibly, it was also a time when the Reserve Bank of Australia assured the nation it would not increase the cash rate until 2024 when inflation would likely be within its 2-3% target range.”
Fast forward 11 months and it’s been a volatile year, with high inflation and high levels of global uncertainty. Despite this Novartis performed well, with Talaria’s investment team still backing the stock going forward.
“Operationally the company has delivered in line with expectations and has made efforts to streamline the business throughout the year,” said Talaria Co-CIO Chad Padowitz.
“It sold its shares in Roche in late 2021 for approximately US$20 billion and has affected a US$15 billion buyback with the proceeds. This is meaningful when you consider Novartis’ market cap of US$200 billion.”
It has also committed to spin-off its generic pharmaceuticals business Sandoz, as well as other non-core operations, helping to streamline the core company, Padowitz added.
“The shares trade on a more than 7% free cash flow yield and a 4% dividend yield,” he said.
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