Damien Conover: We recently reviewed the pipelines for the large-cap pharmaceutical and large-cap biotechnology firms, and our aggregate takeaway is these firms are well-positioned for growth over the next five years. In aggregate, we think these large-cap pharmaceutical and large-cap biotechnology firms will grow at about 4% annually on the top line and through cost-cutting and through some leverage get about 6% annual growth on the bottom line. This is really important for the moats that we assign to almost all these firms. Most of these moats are wide moats. We think they are well-positioned to offset upcoming patent losses with their next generation of molecules.
When we look at stocks specifically, a couple of names that boil to the top that look specifically undervalued, Roche and GlaxoSmithKline are two names we are highlighting. Both have strong pipelines, and both are well-positioned to grow through patent losses. In Roche's case, they are well-positioned in immuno-oncology. This is the next generation of cancer drug that really helps the body find cancer and eliminate it. In Glaxo's case, they are really looking at the next generation of respiratory drugs. Not as well-positioned from a pricing standpoint, but strong enough position to support the dividend which right now is over 5%, and we think will be safe.