) has hit my $71 target price. I was fairly aggressive when I set that target price.
The drug maker does have one of the sector’s most promising pipelines of new drugs -- but a leading seller Diovan (10% of sales) lost patent protection at the end of 2012, and Gleevec is scheduled to lose patent protection in 2015. (The recent decision by an Indian court to deny Novartis patent protection in India for Gleevec is a non-issue as far as the share price is concerned, in my opinion.)
Given the extended nature of the current market rally, I think it's risky to push my target for Novartis higher here. I don’t this is the time to add risk to a portfolio.
What I’d prefer to do is sell this stock at my target price and look for a stock in the sector where the risk has come down after recent news. I’ve got one in mind and I’ll be looking to add it after the volatility expected in the next few days -- meetings of the Bank of Japan and the European Central Bank, and Friday’s numbers on U.S. job -- has receded.
I’m selling Novartis with a 14.7% gain since I added it to my Jubak’s Picks
portfolio on December 7, 2012. The shares paid out a dividend on March 1 to shareholders of record as of February 25.
At the time of this writing, Jim Jubak didn't own shares of any companies mentioned in this post in personal portfolios. When in 2010 he started the mutual fund he manages, Jubak Global Equity Fund (JUBAX), he liquidated all his individual stock holdings and put the money into the fund. The fund may or may not own positions in any stock mentioned.
The fund did not own shares of Novartis as of the end of December. For a full list of the stocks in the fund as of the end of the most recent quarter, see the fund's portfolio here.