Merck & Company (MRK)

Had great success during the pandemic; their vaccine led. The company just offered growth warnings. He prefers Merck for its better valuation and their key drug Keytruda which makes up 35% of their revenue.

Benefitted from Covid vaccines. Patent expirations in a couple of years. How will they continue to grow? Company is confident in acquisitions and internal R&D. She's looking at it, no decision yet. Cheap multiple, attractive yield. More of a deep value play.

MRK's done relatively better. Drugs going off patent also, but pipeline is a bit better. She's looking at this one too, still assessing.

She's overweight the healthcare sector as a whole, to withstand both volatility and a potential recession. Diverse portfolio. Earnings have climbed for years. Gained over 20% in August alone, so could be start of an uptrend. Better-than-expected earnings and sales. Increased guidance. Yield is 2.65%.

His homework shows that MRK is an excellent opportunity on pipeline, future growth, earnings, and cashflow. 

Can do the heavy lifting in your portfolio.

Excellent company with strong R & D capability.
Trading at good price for long term investors.
AAA balance sheet.
Strong dividend yield with excellent coverage (retained earnings more than 50%).

They're holding an investor event on Monday. They bought a company to bulk up their autoimmune pipeline, but he expects the meeting to focus on their oncology drug, the best in the business.

Once consumer division gets spun out, JNJ will look more like MRK as a pure pharma play. He owns MRK, and it's performed defensively well, with a strong portfolio. JNJ is more diversified, but MRK is a better company.

Still owns share in company
Very strong pandemic performance. 
Excellent margins in healthcare business.
Very bright outlook for business.
Demand for healthcare products not slowing down.
Expecting new pharma products in the R&D pipeline. 
Lots of outstanding patents that protects business model. 

It demonstrates amazing execution. One of its therapies continues to be dominant with 400 studies on the go. Not too expensive.

He's bullish the drugmakers. Trades under 20x PE

Drugs are coming off-patent, so they bought a biotech at a big price to get that drug pipeline growth. Wait and see if that pipeline works.

Just announced that Merck will buy Prometheus Biosciences for $10.8 billion. He's been keen on Prometheus ever since they announced phase-2 results of their main drug drug, which treats inflammatory bowel disease. Merck is eager to diversify away from their anti-cancer drug. PB has almost no revenues, but he feels this will be one of the greatest buys in pharma history.

Does not own shares in the company at this time.
Prefers other companies in the sector.
Trading at 16x earnings.
Current share price could be good price to buy depending on knowledge of the company.