Barrons has a bullish article on Bristol Myers, a stock that we and a lot of our clients own:

Up 30% since hitting a 12-year low in October, the stock is rebounding from a 15-month selloff amid worries about investment losses, new drug setbacks, and, of course, the overall bear market.

To be sure, takeout speculation has fueled some of Bristol’s recent gains.

Yet sweeping changes over the last year are paying off for the drug giant, and could keep its profits and stock price rising.

Meanwhile, the stock’s price-to-earnings multiple is bouncing off a 10-year low.

“I would not buy the stock just on hopes of a takeout, though the potential exists,” says Jason Napodano, an analyst with Zacks Investment Research. “Bristol is well positioned with a good pipeline, the cash to do deals and keep paying a dividend and, most importantly, double-digit earnings growth.”

Despite divestitures, the Street expects Bristol’s profits to climb 15% in 2008 and increase another 17% in 2009 to $1.97 a share thanks to cost cuts and rising sales. But estimates should rise as profitability improves, says Ruairi O’Neill, senior equity analyst with PNC Capital Advisors.

Bristol has eight drugs in late-stage development or awaiting approval from regulators.

Meanwhile, experts say the drug maker ended 2008 with $8 billion in cash. And by 2011, Bristol plans to boost its cash flow by up to $1 billion.

We continue to like Bristol for a variety of reasons and are looking to add to positions on pullbacks – if we get them.

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