Pfizer Inc (PFE)

(Market Call Minute.) A large cap Pharma that provides an attractive yield. There has been a lot of M&A activity in the sector and they have products in the pipeline.

(Market Call Minute.) One of the better growth stocks in health care. Right now there is a lot of risk in the health care sector going into the election, from both sides.

They’ve been restructuring their portfolio and selling off non-core, and trying to focus more on big segments of their business. If you want exposure to Pharma, this is fine. The worst is probably behind them.

CVS-N is just like Coke and Pepsi. They are half drug retail and half pharmacy benefit manager. It is hard to find areas in the sector that are less expensive. A MRK-N or PFE-N have done nothing for years. The whole industry has changed.

A super, high quality stock that people have owned for decades and decades. A constant dividend grower. Has always had a great pipeline of drugs. Doesn’t believe the entire drug industry is either a Long or a Short. Wait to see who is elected in the US, because that will have a very big impact on sentiment.

You are not paying a lot for the valuation on this, about 13X next year’s earnings. Has 3 business lines including innovative drugs, established pharmaceuticals and oncology and consumer. You could see a split of one of those businesses. Has a great dividend.

Likes healthcare in general. It has some of the highest growth rates and tends to be trading at lower valuations. This is one of those companies. Have had some very good acquisitions, and valuations are attractive. This would be a long-term, safe, more defensive, and in one of the best sectors. Good management. 3.5% dividend yield.

Believes this is long-term. It could be a little lower a year from now, but in 5-6 years it is going to be much higher. This is the right space to be in. Dividend yield of 3.48%.

Just reported and had quite good earnings. They are reeling, of course, from the government decision to not allow the Allergan deal to go through. There is a lot of debate because the 2 companies were within the law, but the tax inversion issue is a big one, and the way it was done is leaving a bad taste in people’s mouths. Pfizer is just starting to move out of the issue of Lipitor coming off patent. It was a blockbuster drug before, but when it goes generic you see sales drop dramatically. Their pipeline has been building. This company has had basically flat revenues and earnings for 4 or 5 years, and is trading at about 20X earnings. A bit of a “show me” stock, and that goes for most pharmaceuticals. You are better off going into biotechs. Prices have come down quite dramatically, and are trading at cheaper multiples than Pharma drug companies. Have a look at Biogen (BIIB-Q) or Celgene (CELG-Q).

Very topical now because their deal with Allergan just broke. A lot of what you are seeing on the stock in the last few days is Short covering. This is a standalone company, and falls into the category of being safe, relatively stable, and pays a good yield. This is continually growing from a demographic perspective. He would wait before buying because of the Short covering. It will probably settle back in the next couple of days. You really can’t go wrong with this.

Investors have cheered on the fact that the deal is dead at this point. It has decent cash flow that will grow over time. He does not like the 14 times earnings to get a single digit growth rate. He would prefer others with higher growth rates.

Currently prefers Shire (SHPG-Q) or Roche (RHHBY-OTC). Roche as one of the best oncology programs out there. Shire has sold off because they did an acquisition which the market was concerned with.

Chart shows that this is extremely volatile. Sees some support coming in at around the high $20s. It is coming into an old level of support and there is a decent chance it could bounce off of that into the low $30s, but you are taking a chance. A very hard chart to read as there are no trends.

The nice thing about this is that it is cash flow oriented and pays a 4% dividend yield, but the stock price has been a bit rough recently. The stock is trading below its 200 and 50 day moving averages, so from a technical perspective it is not great. There are probably some synergies in earnings accretion from its acquisition of Hospira, and probably more things coming on down the road. He would stay away for the time being.

A great name. Very inexpensive and is trading with a good yield. Large cap Pharma is a great area to hide out in, with reasonable yield.