If you ever played one of those sports games like football or in russia, pretty much any sports or just walking down the street when you get hit in your back and you didn't pay attention, i mean you didn't, expect the hit it's kind of hard to get Up, it's so painful the surprise, the shock, you know how it feels the same thing will happen to you. If you let your portfolio just sit there with all of its growth stocks and teslas and volunteers and bitcoin, and let it get slacked by inflation. Now we don't want to let that happen to you and i've been warning you for months that inflation is about to hit not hyperinflation, like some idiots, think real inflation, but inflation that will actually make you pay. Now, in this video we're going to use a company that fits the profile of the type of companies, you want to have in your portfolio before this thing hits, and that is exactly why, in this video, i'm going to teach you how to bulletproof your portfolio against Inflation before it happens, a periodically as a preventative, medicine and speaking of medicine, i think healthcare would be one of the best industries to invest in during inflationary times.

There's a lot more. We talked about this on the patreon and our channel members page and by the way, if you want to learn more about this, we're doing a whole series - 30 companies in 30 days, which are completely inflation - proof that you might want to consider for your portfolio. If you want to sign up it's five bucks a month and you can leave right away after you learn about the 30 companies, i don't care it's your choice, but in this video i want to give you a real life example of how to do this and The best way to teach somebody is not by auditory learning. I can give you all the rules, but it doesn't mean jack.

If i show you an actual company that fits the profile to perfection, i think that's a way better way to learn now in this video. We're going to take a company called bmy and, as i mentioned earlier, this isn't the only category which will give you that protection beyond healthcare. You can look at energy, you can look at infrastructure. You can look at real estate, there's a lot of different opportunities to actually hedge against inflation.

The problem is that you got to find something that people don't know about yet something not as obvious, obviously, everybody's buying real estate right now like crazy. For that reason, so it's already overvalued. The inflation hedges are well known, gold, real estate assets, so it's obviously going to go. Shooting up.

You got to find the diamond in the rough that people are not paying attention to and hedge your bet there and it's not called a diamond and rough for nothing. It's hard to find and it's hard to identify. But in this video i'm going to teach you how, even though it's not the most intuitive way now check it out in this video we're going to go through the entire set of tests, we're going to do a full dcf of this company. Bmy discount cash flow evaluation model we're gon na, take a look at the management, their financials, their business model.

Everything that you need to understand about this company, but the overall subject is definitely inflation. Protection and this company definitely fits the bill because i think it's flying under the radar. Beyond my understanding, i don't understand why people can't see this, but in this video you'll be the first to find out. So why not? And just a quick word for the new people here: if you have inflation, why does it actually hurt growth stocks and doesn't hurt value stock as much well? The simple answer is cash flow.

If you have positive cash flow today and a lot of it, you don't have anything in the future, but if you're a growth company - and you have a lot of upside coming in the future and the higher the inflation goes, the higher the interest rate will go. Obviously, bringing down the value of those future dollars in your growth companies as simple as that. Now, let's get to it. Okay, now, let's take a look at seeking alpha, because i think it's hands down the best place to look at aggregate financials performance and everything and i'm not affiliated, there's no affiliate link.

So, first of all, one thing you should pay attention to is: the company is valued at 146 billion dollars. Now, there's not a lot of short interest, meaning that smart money is not betting against this company. At this price point 73 under one percent of short interest. The other thing you should notice that this is a dividend: company they're, paying out dividends, and here you have the forward dividend yield.

Now this is a straight up pharmaceutical company. They make drugs for anything you can imagine, but there is no vaccine play. There's no covert play but historically they've been very consistent in generating positive cash flow. Every single quarter, as i'm about to show you, as you can see here, their revenue growth year over year was 38.

Now, if you look at the future growth, it's not as good, but it's still very impressive, 22 and 37 for ebitda, that's actually very impressive and now look at their profitability for a pharmaceutical company. I'm impressed 80 gross profit margin, which is phenomenal. Now, eb, the margin 43, also extremely impressive, and for those of you who notice this is not a glitch. They actually have negative 14 and a half percent net income.

Now how the hell do you have a negative 15 net income when you're bringing 43 ebitda 80 gross margin? Well, the answer is that this is a one-time thing because of an acquisition they did, and this is nothing to be worried about. This is not sustainable. Long term this is about to go away. I will show you everything in a second: don't worry about it now.

This is the dividend, yield and actually they're expected to give 3.03 next year, as far as dividend yield not bad at all five-year growth rate 4.6. So it's a dividend company, not something we are accustomed to see in our portfolio, but in inflationary times getting a dividend. Positive company actually makes a lot of sense and now we're getting to the filemignon. This thing is phenomenal.

Look at the cheapness of this pe to non-gaap. Look at this 10, that's 60 undervalued, ev to sales, 4.22, 47, undervalued, look at this eevee to ebitda 9.85 53 on the value they're undervalued in every single category price to sales 3.3 60 under value to say that this company is undervalued. It's like saying that putin is very popular with 50 year old women in russia. That's a gross understatement of how much they love putin and here's some more interesting facts.

It's been trading sideways for the whole year. Look at this! It only did eight percent this year. Four percent over the past six months now, over the past three months, doing a little bit better 5.6, but nothing to write home about the company has been flat. This is as flat as a lot of tire when it hits just a little bit of rubble, but it means that there's a lot of upside baked into this price, as you just saw with the valuations, and now, let's take a look at what other analysts are Saying about bristol myers and if you want to get a subscription to tip ranks with a discount, i have a 10 discount code in my description.

Section go! Get it right now. It's definitely the best tool to evaluate other analysts now check it out now. The consensus price is 74 over 65, which is at right now. However, i do want to look at which analysts are saying that, so i only want to have the analyst with the four stars and up everybody's saying the same thing: the company is undervalued.

The only question is by how much some guys give it 86 - some guys, 78, some 66, which is right on the border - that's a hold, but some give it 70. Some give it 78. I'm going to tell you my price target in a second, but the consensus is that there's a lot of meat on the bone which has not been eaten yet now. The next part is management.

If you've been watching my videos, you know i urge you to take a look at. Who is the ceo? I don't want to. Have you give your money to a bozo because bozos hire bozos and bozos make bozo policies lose you money now we want to make sure we're giving our money to smart executive people who know what the hell they're doing. Let's take a look at giovanni cafforio.

What a great name so, first of all, he's an md, so he's an actual doctor running a pharmaceutical company, which is a great sign, now check it out. I always want to look at how long this guy has been with the company and check it out. He joined in 2000 so he's been an employee of bristol myers quip for 21 freaking years. That says a lot about the company.

As you can see right here, he moved up. He became the ceo at some point and for the past five years, he's been the ceo and for the past four years, he's also been the chairman of the board, so this guy is not only in charge, he's really in charge. He doesn't even have a chairman above him, he's definitely driving this bus and from what i'm seeing based on the financials, which i'm about to show you he's doing one hell of a job. Okay, now, let's take a look at the financials of the company, so first of all we're seeing huge growth: 2018.

2019 2020. They went from 21 billion to 41 billion in sales. That's a great sign: 42 billion and a half in 2020 in sales is a phenomenal number, specifically looking at 26.1, the previous year and for the untrained eye. This seems like bad news.

Well, they made 42 million and they lost 49. So they're well, not exactly. Let me show you why this 49 is completely fake, now check it out, cost of goods sold is 11, which means those are the real actual expenses to make these pharmaceuticals now marketing is also selling is also. This is all real expenses now.

At this point, you also have to add r d, research and development, but that's it anything beyond this point is just nonsense. Google and i'll explain why these 21 billion are total bs, not that it's not real. One of them is not a cash flow item, which is amortization. The 9.6 billion is amortization.

This is not cash flow. This is a tax benefit. The other one is an acquisition. They bought myocardia for 11.5 billion, actually more than 11.5 billion, but here it's showing 11.5 billion.

So this is an actual expense, but this is an acquisition, expense of a one-time nature. They bought a freaking company, so this 11.5 billion has to come off. This also has to come off, because this is not cash flow and what you get here, instead of a 7 billion loss which actually shows you right now you get a 14 billion net and i'm actually going to show you that 14 in another place in this Financials, where you can actually see that i'm not blowing smoke up your ass, but this is the real number: the company generated 14 billion in actual operating income. If you take away amortization and some acquisition costs, then definitely you have a seven billion loss, but wait.

There's more total current assets are 30 billion. Now goodwill is 20 billion. This is trash. This is nothing.

This is meaningless. This is not a cash flow item. You can never get this money back. So when you look at total assets here, 118, it's actually 100 or rather 98 billion dollars in total assets.

We have to be mindful of this now check it out. Here's where it's getting interesting now short term liabilities, 2.3 accounts payable 2.7. So far, so good. Now, here's the thing that i want you to see: 48 billion in debt.

That's a lot of debt 48 billion in total that that's a lot. However, the total ratio of 80 billion to 100 billion of actual assets without goodwill is still in the positive and they do have enough cash flow to actually make it into a 25 net debt, which means that this thing is not as bad as it seems. Plus. I'm going to show you why, without the acquisition and without the actual amortization expenses, these guys would have been just fine look at this net cash provided by operating activities.

You remember when they told you 14 billion 14 billion. It's right here. I wasn't blowing smoke up your ass. This is the real number the company generated 14 billion from operating.

However, none of this gets recognized by reader investors who don't understand this because they don't know how to dig into this, and that creates a diamond and draft, because people are not looking at this as a 14 billion. They look at it as a negative seven. You have a company, that's a 14 billion positive and operating being priced like a seven negative. That creates a massive opportunity, especially when this company is primed for inflation hedging, with its cash flow with healthcare as an industry.

It's a really good opportunity, that's not being recognized in the market and now, let's take a look at the dcf which you all love, which will give us the actual pricing of this company, where it's supposed to be. Currently, it's priced at 146 billion 65 dollars per share, but i think it's gon na be much higher. Let me show you my dcf now i just use the free cash flow that they currently have and i added five percent annual growth for five years. So five percent per year, based on 14 billion in cash flow.

Now we use the 10 for the discount rate, and this is what we got now. What we got is 75 billion in present values. We applied a four percent long-term growth and we got 242 billion. Now that 242 billion is net 25 billion of debt, which means that this was 267.

But it comes down to 242 because of the negative debt. And now right here we have 150 billion, which is based on a nine and a half multiple, because it's healthcare and what we have here right now. These are the actual prices. What we have is sixty six dollars for the multiple perpetually gives us added seven, which gives us eighty seven dollars per share right here, which is 33 upside versus the current 65 dollar price, and that's how you get the perfect hack, a company.

That's currently positioned to protect against inflation, because it's cash flow positive. It's in health care, it's primed, to give you an offset against inflation, and yet it's still unrecognized by the retail public, because its financials are actually a little bit misleading and they don't understand the true value and also it still has a lot of growth, backed in 30, regardless of inflation. That is how i want you to look at companies. Try to find these diamonds in the rough and, as i mentioned before, we have a whole plan - 30 companies in 30 days, which will do similar analysis to this, and it's going to be posted on our patreon and the channel members section.

It's five bucks per month to join, you can join and you can go through the primer with us and leave after a month. If you don't see any value, i'd appreciate it. If you check it out, you'll also be supporting the channel. Thank you so much for the current channel members and the patrons we'll see you guys in the next video.