When you invest in a stock while taking a long-term buying perspective, you naturally expect that it could be five or 10 years before you start to see a reasonable return on your investment. By tracking your portfolio returns, you can hone your buying strategy and learn how to identify stocks positioned for substantial growth.
Understandably, economic recessions can be scary times for investors. But there are opportunities to be found by those who can take the big picture view and know the market always recovers, and who have cash on the sidelines to deploy. For example, if you invested $1,000 in Bristol Myers Squibb (NYSE: BMY) during the last recession, you might be amazed at how much that initial investment would have offered in returns by now.
The Great Recession officially started in December 2007 and ended in June 2009. Assuming you purchased Bristol Myers Squibb shares during this economic downturn, let's see how much your investment would be worth today.
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Today, $1,000 would be worth...
To set the stage for your initial investment, let's assume that you purchased BMS stock in 2008, smack dab in the middle of the recession. That year, its stock price was around $20. With $1,000 to spend on your starting investment, you would have been able to buy about 50 shares.
Fast forward to today: Despite the stock taking a nosedive in March due to the emerging threat of the coronavirus in the U.S., shares have since rebounded to the region of $60 per share since mid-April. Today, your initial investment would be worth about $3,000. That's a whopping 200% return on your investment -- meaning your money tripled.
If you had started with a somewhat larger sum at the time, say $4,000, you could have purchased about 200 shares of Bristol Myers Squibb stock in 2008. Over a decade later, that investment would now be worth $12,000. It just goes to show that even starting off with a more modest investment could reap significant returns in a relatively short period of time.
Important updates for investors
Bristol Myers Squibb entered the rocky stock market of 2020 after a solid performance in 2019. The company amassed revenue totaling $26.1 billion last year, and in the final quarter of 2019, revenue was up 33% to $7.9 billion. In the United States alone, BMS experienced a 42% spike in revenue in the final quarter of 2019 at $4.8 billion. Q4 2019 also marked the closing of the company's acquisition of Celgene, a $74 billion deal that brought an impressive portfolio of drugs into Bristol Myers' stable.
During the first three months of 2020 -- the early days of COVID-19, when investors were just beginning to worry -- Bristol Myers Squibb rang in another stellar quarter. Revenue in Q1 2020 went up by a staggering 82% on a year-over-year basis, to $10.8 billion, mainly because of the Celgene acquisition.
A few notable assets BMS gained from this acquisition include blood cancer drug Revlimid and blood thinner Eliquis, which raked in $2.9 million and $2.6 million in Q1, respectively. The company's purchase of Celgene was responsible for 71% of the overall growth achieved in the first quarter of 2020. In the U.S., Q1 revenue was up 96%, totaling $6.8 billion. Earnings results for the second quarter of the year are due on August 6.
What about this recession?
The U.S. officially entered recession territory in February. Of course, the recession caused by the COVID-19 pandemic and the widespread lockdowns to stop the spread is a very different animal than the last recession. But one thing hasn't changed: there are profitable opportunities for nimble and brave investors.
Given its low share price and exceptional performance, it's not hard to see why this blue-chip stock is popular with growth investors. With a nearly 3% dividend yield and boast-worthy portfolio of existing and pipeline drugs, Bristol Myers Squibb stock presents an excellent buying opportunity for budding and veteran investors alike.
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