BMY - Bristol-Myers: Why I Am Buying More Of This Falling Knife Yielding 5.84%

2024-06-04 09:00:00 ET

Summary

• Bristol-Myers Squibb has experienced significant declines in its stock price, but I believe it has potential for future growth.
• The risks of investing in BMY include underperformance compared to the market and potential setbacks in its drug pipeline.
• I believe that BMY is undervalued compared to its peers, and I am adding to my position in the company.

I am not a trader, and I make most of my investment decisions based on a long-term time horizon. I can't time the market, and Bristol-Myers Squibb ( BMY ) is a perfect example of an investment that's continued lower despite my long-term investment thesis. BMY looks like a falling knife, and the cuts are getting deeper and deeper. Over the past year, shares of BMY have declined by -36.24% as they fell from the mid $60s to the low $40s. Nothing about the long-term charts is exciting either, as BMY has declined by -9.43% over the past five years and -13.04% over the past decade. BMY is trading at its lowest levels in a decade, and shares have lost -49.35% of their value since reaching $81.13 on November 28, 2022. It's too early to tell if the floor is in for BMY as shares bounced along the $50 level for several months before they ultimately formed the next leg down to the $40 level. I was adding to my position around the $50 level, and after reassessing my investment thesis, I plan on dollar cost averaging into my position in the low $40s. BMY could continue to be a falling knife and cause investors more pain, but I think BMY has too many drugs in its pipeline for it to continue on a downward trajectory indefinitely. Now, I am getting paid almost 6% to put more capital at risk and wait out the storm. I don't see a scenario where BMY disappears, and feel that the risk-reward scenario is worth it for me....

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