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He will relaunch his hedge fund with former executives of Vinik Asset Management

Prominent stock picker Jeffrey Vinik is planning to relaunch his hedge-fund firm out of Tampa, Fla., in what would mark his third return to investing clients’ money.

Mr. Vinik, 59, said he plans to run the firm for the next five to 10 years, in part to increase how much his family’s charitable foundation can give away. He hopes to raise $3 billion for Vinik Asset Management and plans to launch March 1, said a potential investor who has spoken with Mr. Vinik. He also owns a professional hockey team, the Tampa Bay Lightning and has joined with Bill Gates’s investment firm to invest in Tampa’s downtown.

“I miss the markets, I miss picking stocks, I miss competing,” Mr. Vinik said. “I’ve been doing it with my family money for the last five years, but it’s not the same as being in the big leagues and competing on an institutional basis.”

Mr. Vinik rose to prominence helming Fidelity Investments’s Magellan Fund in the 1990s but left Fidelity in 1996 after a bad bond bet. He resurfaced later that year with his own hedge fund but returned nearly all investors’ money in 2000, citing a desire to spend more time with his wife and young children.

He took in significant outside money again in 2005, and Vinik Asset Management shone in 2008 when it lost 4%, as hedge funds on average lost 19%. Mr. Vinik closed the by-then $8 billion firm in 2013, saying in a letter to investors it had notched 17% annualized returns since 1996. The firm was also hit by significant redemption requests amid a restructuring that included the firm’s move from Boston to Tampa.

With the relaunch of his firm, Mr. Vinik said he plans to stick to his fundamental stock-picking strategy of buying companies with good management teams and prospects while betting against the reverse. He is committed to that strategy despite the rise of algorithmic trading and passive investing, developments some traders say have made markets more difficult to navigate. Mr. Vinik said he believed the growth of passive investing had actually created opportunities for stock pickers like himself.

“I am committed to this, and I am extremely hungry,” Mr. Vinik said. “We won’t shut down again.”

Since 2013, Mr. Vinik has been investing his own money through his family office and been focused on the Lightning, among other projects. He sold his minority stake in the Boston Red Sox baseball team last year.

He said he had strong chief executives running his noninvestment interests and was focused now on his investment business, where he will be the sole portfolio manager. Mark Hostetter and Gerry Coughlin, former executives of Vinik Asset Management, will be co-presidents of the relaunched firm.

Former client Victor Linell, of hedge-fund investor Cross Shore Capital Management LLC in Great Neck, N.Y., said he was considering whether to invest with Mr. Vinik. The key was whether Mr. Vinik would be fully engaged. “That’s the million-dollar question,” said Mr. Linell.

“The Vinik of old was always calling companies, working 24-7,” Mr. Linell said. “You hope he’s coming back as the Vinik of old.”

America’s biggest public companies are warning that their earnings may not be as strong as they hoped this year, intensifying pressure on a bull market that has struggled to regain its footing.

Firms in the S&P 500 were projected back in September to report fourth-quarter earnings growth of 17% from the year earlier. But dimmer expectations for global growth and disappointing holiday sales have forced many companies to slash their forecasts, pushing the estimated earnings-growth rate for the quarter closer to 11%, according to FactSet.

The drop-off in estimates—the steepest since 2017—is the latest sign that U.S. corporations, from retailers and airlines to phone makers, are losing momentum after several quarters of standout growth.

The wobbling stock market reflects anxieties about how swiftly firms have been lowering their forecasts. Stocks slid in early January after Apple Inc. cut its quarterly revenue forecast for the first time in more than 15 years, citing an unexpected slump in iPhone sales in China. Macy’s Inc. shares suffered their worst one-day selloff ever on Thursday after the retailer lowered its guidance for the year. And airline shares fell after Delta Air Lines Inc. cut its fourth-quarter forecast, citing a weaker-than-expected holiday season.

The string of downbeat forecasts puts the stock market in a precarious position heading into a week when banks including Citigroup Inc., JPMorgan Chase & Co., Wells Fargo & Co. and Bank of America Corp. are scheduled to report quarterly results. The S&P 500 is up 3.6% for the year but still 11% below its all-time high after a steep selloff in the final months of 2018.

For many investors, the coming earnings season will be a test not just of how profitable companies were in the fourth quarter but also of executives’ optimism about the future. The results will also indicate how well U.S. companies are holding up as economies across emerging markets and the eurozone show signs of faltering.

“These days, people are interpreting everything as the glass being half empty,” said Matthew Forester, chief investment officer of BNY Mellon’s Lockwood Advisors. The firm has generally been focusing on shifting money into higher-quality credit, he said, as well as encouraging advisers to increase allocations to so-called defensive sectors, areas of the stock market that tend to hold up during spurts of volatility. “That’s part of the challenge as we look forward.”

Some analysts attribute much of the unusually steep drop-off in earnings estimates to Apple’s cuts. The company ranks among the five biggest publicly traded firms in the world, meaning changes to its earnings estimates can disproportionately impact overall estimates.

Excluding Apple, as well as energy firms that have trimmed estimates due to falling oil prices, “we’re back to something that’s more or less on trend,” said Jonathan Golub, chief U.S. equity strategist at Credit Suisse .

Analysts also point out that, even with earnings growth expected to decelerate in the fourth quarter from the third, companies look poised to post healthy profits anyway. If S&P 500 firms grow earnings by the estimated 11%, it would mark their fifth straight quarter of double-digit earnings growth.

Yet that hasn’t stopped investors from worrying.

Over the past year, corporate earnings haven’t been the balm that many had hoped for the markets. S&P 500 firms grew their profits in the third quarter of 2018 at the fastest rate yet that year. Stocks and bonds slumped anyway, with the S&P 500 ending the year with its worst annual return since 2008.

Some investors have ascribed the fading power of earnings to unease over the fact that profit growth appears to have peaked for the remainder of the bull market. From the fourth quarter onward, investors are largely expecting a deceleration.

Even though the U.S. economy is “still running at a decent clip,” the volatility hitting markets shows many investors are fixated on the “sharp deterioration in growth expectations,” Mr. Forester said.

That makes commentary from company officials particularly important to analysts and investors this year.

In his Jan. 2 letter to investors, Apple Chief Executive Tim Cook said most of the company’s expected revenue shortfall stemmed from weaker-than-expected sales in China, which he partly blamed on the country’s trade fight with the U.S.

Other companies affected by global trade tensions could echo Apple’s warning in coming weeks. Caterpillar Inc. and 3M Co. shares slid following their third-quarter earnings reports in which both companies said U.S. tariffs on foreign steel and aluminum were increasing their costs.

“The commentary that we’re going to get on China and trade are going to be potentially pretty bad,” Mr. Golub said. He added that it was difficult to tell whether strong numbers would ultimately have a bigger effect than “sloppy commentary” on the markets.

That could be enough to entice buyers back into the market, especially with stock valuations looking relatively low. The S&P 500 trades at about 15.1 times its projected next 12 months’ of earnings, below the five-year average of 16.4 and above the 10-year average of 14.6, according to FactSet.

“Peak growth is not the same thing as contraction, and I think investors will coalesce around that idea perhaps soon,” said Michael Arone, chief investment strategist at State Street Global Advisors, which has been recommending investing in companies with high profit margins and healthy balance sheets as economic growth slows.

Barrons weekend summary: Positive feature on BMY; positive on airline sector; Speculates Apple should make a big acquisition like Nintendo

* NY TIMES (Saturday): Following Donald Trump’s firing of FBI director James Comey, law enforcement officials became so concerned by Trump’s behavior that they began investigating whether he was working on behalf of Russia against American interests; Trump opted against declaring a national emergency to fund his border wall, and now finds himself boxed in as he searches to end a political stalemate with Democrats; After a series of conflict of interest scandals, New York’s Memorial Sloan Kettering hospital will require executives to curb ties to the pharmaceutical industry, and will conduct a wide-scale review of other policies; The government shutdown is starting to affect air travel as a growing number of security agents refuse to work for no pay, though for now the impact on passengers has been limited; An MIT study found that dense cities that once offered better pay for low-skilled workers, as well as better kinds of jobs, no longer offer such economic advantage for workers without college educations;

(Sunday): The Veterans Administration will shift billions of dollars into private care, which could mean shorter waits, more choices, and fewer requirements for co-pays, but could curb other resources for the agency; A White House strategy to compete with China’s booming infrastructure presence in Africa has made little ground, but it’s unclear whether Beijing’s Belt and Road Initiative even poses a real threat to the U.S.; + Huawei: Company fired an employee who was arrested in Poland on charges of spying for the Chinese government, saying in a statement on Saturday that he has brought disrepute to the company; Sunday Business: Some entrepreneurs are rejecting venture capital, claiming there is a connection between VCs pushing too hard for growth and the tech industry’s myriad crises, or that VC expectations are too high.

* WSJ (Weekend): Poland’s arrest of a Huawei sales director on charges of espionage for China raises stakes over Western allegations the telecom equipment giant is a spying tool for Beijing; Japan revived its economy despite an aging demographic by encouraging the elderly and women to work and breaking a longstanding taboo against immigration; +/- AAPL: Tech giant will release three new iPhones this fall, including a successor to the struggling XR, but will stick with LCD technology already in the pipeline ahead of a planned switch to OLED in 2020; New U.S. regulations will allow railroads to operate passenger trains that can travel at speeds of as high as 220 mph, but for now no track in America can handle that kind of velocity; When he was a Fed governor in 2012, chairman Jerome Powell worried the bank’s bond purchases were distorting markets, and encouraged his colleagues to end the stimulus program; The current flu season appears less severe than the 2017-2018 season, which was particularly bad, but 7.3M people have still fallen ill so far, according to CDC data; The Navy will expand its role in the Arctic as climate change opens up more ocean waterways and the U.S. vies with Russia and China for influence in the far north; New York Democratic senator Kirsten Gillibrand is set to announce a 2020 presidential run, and is hiring key staff members and planning a trip to Iowa; Democratic-led states are quickly expanding public healthcare proposals in the wake of their November midterm victories, but their efforts face criticism from Republicans; +/- BA: The SEC and the Commerce department are looking into the company’s relationship with Global IP, a satellite startup backed by China’s China Orient Asset Management; H.O.T.S.: Legacy credit card companies are likely to retain their market position despite the proliferation of new ways to pay for things; Following disappointing sales of its “Destiny” franchise, ATVI needs to show investors it has potential successes in the pipeline; “Expectations have been lowered for banks, but perhaps not by enough as they head into earnings season.”

* FT (Weekend): Two Chinese retailers, JD and Suning, are reducing prices of the AAPL iPhone 8, 8 Plus, and XR in a bid to boost sales, though prices haven’t changed on Apple’s website; Donald Trump caught the technology and financial services industries off guard with a statement that he was preparing to make substantial changes to the visa regime for highly skilled workers; “The sudden departure of World Bank president Jim Yong Kim has triggered confusion among staff and raised questions about its future and Trump administration suspicions of international institutions”; Former Nissan chairman Carlos Ghosn faces at least several more months in jail following new charges of misleading investors and abusing his position; Lex Column: BUD’s well-received bond issuance and lengthening maturities not adding to the load underscores the company’s heavyweight status; Future tax changes in the U.S. may not be of much help to companies, because the first round of Trump tax reforms have strained public finances; As the Chinese luxury sector struggles, Richemont isn’t likely to rebound quickly; Comment: Triggering Article 50, supposedly irrevocable, weakened prime minister Theresa May’s negotiating hand with the EU but strengthened it when dealing with some MPs—yet it turns out the U.K. can simply revoke its notification to leave, says Tim Harford.

* NY POST (Saturday): + YUM: Taco Bell will add more meatless items to its menu, which includes the Vegan Crunchless Supreme, and will be testing its first, dedicated vegetarian menu in stores;

(Sunday): America’s wealthiest people are losing confidence in investing and may be set to move to the safety of CDs and other cash products as market losses amount, according to ET Intelligence Group; + BUD: Starting next month, packages of Bud Light beer will have prominent labels showing the calories and ingredients, as well as the amount of fat, carbs, and protein in a serving. Related ( RAGSX )

Among the suggestions: natural gas and Turkish banks, not leveraged loans

With interest rates rising and stock prices falling, 2019 is setting up to be one of the most challenging environments investors have faced in some time.

To get a sense of what some high-profile investors are thinking for the year ahead, The Wall Street Journal interviewed several hedge-fund managers with some of the most consistent long-term performances.

The managers have a variety of ideas, from being bullish on commodities and Turkish banks, to shorting U.S. leveraged loans and U.K. gilts. Their fears included rising global trade tensions, geopolitical risks surrounding the European Union and the euro, and a potential slide in investor confidence. Other hedge-fund managers say they fear the unrecognized costs of climate change. Here are four of the managers’ outlooks.

Nigol Koulajian runs a purely systematic shop, an industry term meaning he uses various proprietary programs that identify when the character of an asset’s price movement is changing. Often, when prices are bouncing all over the place, that can indicate when a high is being formed, or now, as in the case of natural gas, crude oil and gold, when a rebound appears to be set to take off. That’s what Mr. Koulajian’s programs say is now happening.

“We are currently seeing an unwinding of short positions on natural-gas contracts which had been built up by hedge funds and other institutional investors,” Mr. Koulajian says. “Price volatility is revealing larger swings on the upside and smaller movement on the downside, suggesting a bottom is forming on natural-gas prices and rising prices likely in 2019.”

To Mr. Koulajian, this also indicates oil prices will soon stop falling and start rising. He expects gold prices will start moving upward, too.

The biggest risk he sees in the coming year: stagflation, where inflation and interest rates rise while GDP growth slows.

With the credit market having peaked and a bear market likely under way, Canadian hedge-fund manager Hanif Mamdani says a key area of concern to him is the market for leveraged loans—senior loans made to largely below-investment-grade borrowers.

The leveraged-loan market is now the second-largest corporate debt class in the U.S., behind investment grade, standing at $1.3 trillion. Exceeding high-yield debt issuance, leveraged loans have become the go-to market for highly indebted firms, says Mr. Mamdani.

Insatiable investor demand for high-coupon, floating-rate debt, fueled by how well leveraged loans held up during the financial crisis, has led to the doubling in size of these loans over the past six years. Mr. Mamdani figures that upward of 80% of these loans are issued based on optimistic projections, excessive leverage, and with minimal covenants. With interest rates rising and global growth ebbing, he expects these loans could sell off by 10% or more over the next 18 months.

A simple way that individual investors can play this thesis is by shorting—betting against Invesco Senior Loan ETF (BKLN), an exchange-traded fund that tracks leveraged loans. Because such a short requires payment of the 5% interest yield that the ETF spins off, Mr. Mamdani recommends partially covering that liability by simultaneously being long one-year Treasury bills. He projects net return in 2019 on this defensive hedge to be from 5 and 7%

With emerging-markets valuations bouncing around like a pinball for years, Carl Tohme may have the toughest job of all our managers.

“We have been negative on Turkey since the beginning of 2018,” says Mr. Tohme. “But we believe rate increases by the Central Bank of Turkey, which has doubled its benchmark rates to 24% in September, are beginning to address some of the country’s financial challenges.” This has helped the Turkish lira to rally back more than halfway from its 40% decline against the greenback in 2018.

Although he doesn’t expect to see a V-shaped recovery, Mr. Tohme thinks the Turkish economy and market are on the mend, especially if energy prices stabilize and the Federal Reserve eases up on interest-rate increases.

Because he believes Turkish banks will be recapitalized by the end of the first quarter of 2019, Mr. Tohme considers them to be trading cheap, below 0.5 times book value and around 3.5 times forward earnings, which prices in a projected recession in 2019.

He likes Akbank AKBTY -1.50% and Garanti Bank GARAN 0.51% (the latter majority-owned by the Spanish bank BBVA ). “These are well-regulated, conservatively managed, private institutions,” says Mr. Tohme, “with solid capital and liquidity ratios, which should help them weather the recession and thrive in the subsequent recovery.”

Mounting trade tensions worry Mr. Tohme, especially if they continue to fuel volatility across all markets. But if China and the U.S. begin to work out their differences, and if the U.S. holds off on further rate increases, Mr. Tohme thinks emerging-markets shares and their underlying currencies should outperform developed markets in 2019.

Relative-value trades are where managers look for financial instruments that should trade in lockstep with one another but whose values have deviated. Managers bet these spreads will close.

“Government bond yields should be higher than inflation,” says Bob Treue. “But at the end of the year, the 30-year British gilt yielded 1.95% while an equivalently termed U.K. inflation swap was at 3.30%.”

While the Bank of England’s unwinding of quantitative easing should help boost yields on long-term U.K. government bonds, Mr. Treue says it isn’t clear when this correction will occur. But he says the market will make it happen.

Mr. Treue is short the long-term gilt, believing its yield will rise and price will fall, and he is long inflation swaps, believing the inverse will happen. He has structured the trade as to currently earn money as he waits. The carry costs of the trade can be offset by the yield that part of the transaction generates. Because the inflation swaps are so mispriced, compared with the gilts, the yield currently exceeds costs.

The manager sees significant dislocation from quantitative tightening that’s now under way in the U.S., creating mispricing in the debt market. What he fears most is a rapid meltdown in market confidence as global trade tensions and deglobalization produces a “free-for-all” mentality.

Concessions offered not enough to allay ‘serious doubts’, says competition authority

Germany’s competition watchdog has raised “serious doubts” over the railway merger between Siemens and Alstom, in another blow to a Franco-German deal seen as a watershed for EU industrial policy on China.

The intervention by the independent Bundeskartellamt, in a letter seen by the Financial Times, adds to a chorus of national competition authorities opposing a merger that has full political backing from the French and German governments.

Billed as a deal to create a European champion with the muscle to take on China’s CRRC, the world’s biggest trainmaker, the proposed Siemens-Alstom tie-up is now on the brink of being vetoed by Brussels for creating a virtual monopoly in some European markets.

In December, the Bundeskartellamt advised the European Commission that concessions offered by Siemens-Alstom were “neither suitable nor sufficient” to allay competition concerns in the signalling and high-speed train markets.

The Bundeskartellamt last week confirmed its objections still stood in spite of revisions made by the companies, according to sources familiar with the advisory submission.

The commission, the EU’s top competition authority, must decide on the case by February 18.

The decision is one of the most important since Brussels was given oversight of all big merger approvals in the 1990s, setting a political precedent that could reshape the EU’s approach to contentious mergers in strategic sectors for years to come.

Officials reviewing the deal have so far advocated it be blocked. Margrethe Vestager, the EU’s competition commissioner, is unconvinced of any Chinese threat in the railway market for the foreseeable future and has warned Siemens-Alstom executives that more sell-offs will be needed if the deal is to be approved.

But in a break with a three-decade old convention, the commission’s top decision-making body will on Tuesday discuss the Siemens-Alstom merger before Mrs Vestager makes a formal recommendation on whether to approve the deal.

An increasingly divided college of commissioners will address the merits of the merger in a broader debate on how to create industrial “champions” that can withstand pressure from state-backed Chinese rivals. It offers a clear opportunity for advocates of the Siemens-Alstom deal to make their case.

Bruno Le Maire, the French finance minister, has warned Brussels that applying “obsolete” competition rules to block the merger would be a “political mistake” leaving Europe weaker in the face of China. Paris has made clear that it would see a veto as an opportunity to overhaul the competition regime in the EU.

National competition authorities from Spain, the Netherlands, Belgium and the UK have all raised similar objections to those of the Bundeskartellamt in advice offered to the commission. In December, Siemens and Alstom offered to sell off some of their older high-speed trains and signalling technology to secure EU approval for their merger, but the move failed to impress rivals or the commission.

The Bundeskartellamt submission echoes many commission concerns about the deal. The German authority dismisses the offer to sell off Alstom’s Pendolino business in Europe because it is not a technology that would allow rivals to compete in the market for “very high speed” trains.

The alternative — the offer to license Siemens’ Valero system for a time-limited period — is described by the Bundeskartellamt as “far too short” a licence to make a lasting difference. The conditions also exclude big upcoming high-speed tenders in the UK and Turkey.

Finally, it raises concerns over the sell-offs proposed by Siemens-Alstom to address concerns over signalling. The package included parts of two separate signalling business: Siemens’ on-board signalling systems and Alstom’s trackside equipment. The Bundeskartellamt doubted this “mix and match” approach would leave a viable competitive rival.

Bristol-Myers Squibb has trumpeted its deal for Celgene as an opportunity to create the No. 1 producer of cancer treatments and an earnings powerhouse. Wall Street isn’t convinced.

Investors worry that the combination will do little to improve the prospects for two drugmakers whose shares were among the worst performers in a strong group last year. Since the $74 billion acquisition was announced on Jan. 3, the shares of Bristol-Myers (ticker: BMY) have fallen about 8%, to $48.

With the selloff, however, the stock now looks inexpensive. And if the Street warms to the transaction, the shares could rally. It’s also possible that Bristol-Myers, long a rumored takeover candidate, could attract a bid from the likes of AbbVie (ABBV), Amgen (AMGN), or Pfizer (PFE).

Bristol-Myers’ most valuable asset is its cancer-treatment franchise in the area of immuno-oncology, led by the drug Opdivo, whose sales topped $6 billion last year. Immuno-oncology “is a hot area where many companies want to play,” says Wolfe Research’s Tim Anderson, who has an Outperform rating on Bristol-Myers. For drugmakers that are not already developing cancer treatments that harness the body’s immune system, the only way to catch up is through a deal, he says—and “the only company with a broad-based product in this area is Bristol-Myers.”

Bristol-Myers, with a market value of $78 billion, trades for 11 times projected 2019 earnings of $4.12 a share and for only eight times estimated 2020 profits of about $6. The 2020 price/earnings ratio is the lowest among the major drug companies. Its shares boast a 3.4% dividend yield.

The 2020 estimate is based on Wall Street projections incorporating Bristol-Myers’ guidance that the Celgene (CELG) purchase, expected to close in the third quarter, will increase earnings by at least 40% in the first full year. Such earnings accretion is highly unusual for a big deal, but is possible as Bristol-Myers is paying just 10 times projected 2019 earnings for Celgene. Bristol-Myers also estimates that the transaction will produce $2.5 billion of annual cost synergies by 2022.

But will the hunter become the hunted? A bid for Bristol-Myers doesn’t seem likely now, but the idea has been gaining traction on Wall Street.

Credit Suisse analyst Vamil Divan wrote last week that whether a rival will try to acquire Bristol-Myers “is easily the No. 1 question we have been asked over the past few days.” His list of possible suitors is led by Pfizer, AbbVie, and Amgen, with AbbVie potentially the most interested because of its dependence on its anti-inflammatory blockbuster, Humira, which has lost European patent protection. A potential buyer of Bristol-Myers would presumably scuttle the Celgene deal, triggering a $2.2 billion termination fee.

When the deal was announced, investors homed in on the looming loss of patent protection for Celgene’s dominant blood-cancer drug, Revlimid. Yet Matthew Phipps, a William Blair analyst, says that a combined company could earn $8 a share by 2022, when Revlimid begins to face generic competition. Put a multiple of 10 on those earnings and Bristol-Myers’ stock could be much higher. “The initial move down in Bristol-Myers was an overreaction,” Phipps says. “I’m still recommending Bristol-Myers, but it’s a more complicated story.”

Revlimid isn’t due to face full generic competition until 2026. Earlier and more severe generic competition for the drug is possible, however, and Wall Street tends to assign low multiples to drug companies with major patent issues.

In the deal, Bristol-Myers is emphasizing six promising drugs in its pipeline—including four targeting cancer—with a potential for $15 billion in combined annual sales. It also expects to generate more than $45 billion in free cash flow during the first three years after the combination, a good chunk of which is expected to reduce debt. Bristol-Myers will carry about $50 billion of net debt after the deal.

For investors, Celgene also offers an intriguing play. Its shares trade for $87.50, a $10 discount to the cash and stock portion of the deal, which calls for Bristol-Myers to pay $50 a share in cash, plus one of its shares for each of Celgene’s.

Celgene holders will also receive a contingent value right, or CVR, for each Celgene share. The CVR will pay off if three drugs in its current pipeline are approved by the Food and Drug Administration by late 2020 and early 2021. The CVR is an all-or-nothing bet, with a payoff of $9 a share. Investors stand to earn a 11% return on Celgene to the deal price, assuming no value for the CVR, which could trade for $2 or more initially. Celgene stock could fall if a buyer swoops in for Bristol-Myers and ends the deal.

BTIG analyst Thomas Shrader thinks there is a 50/50 chance of a payoff on the CVR because he puts the approval prospects of the three drugs at 70% to 90%.

The main challenge for investors and analysts involves projecting sales for Opdivo and Revlimid. Phipps’ view is that Opdivo, despite being largely supplanted by Merck ’s (MRK) Keytruda in the large lung-cancer market, can still generate higher sales by being used against other cancers. Revlimid generated about $9.7 billion in sales in 2018, or about 65% of Celgene’s total revenue. Its sales could rise in the coming years before facing limited generic competition in 2022.

Bristol-Myers is a prime example of rapidly changing fortunes in the drug business. A few years ago, it was the leader in immuno-oncology and sported one of the sector’s highest valuations. Now, it has one of the lowest, making it a cheap pharmaceutical play—one sweetened by a secure dividend and the chance of a takeover.