Pfizer Inc (PFE)

He is overweight healthcare in his portfolios and it is all non-Canadian. This is his main pharmaceutical name. Likes the restructuring that they have done. Have restructured and merged with Wyatt and consolidated down to what they wanted to be. Recently spun out their animal health division, which proved to be very good.

Up 27%, not including dividends in the last year. Decent and safe yield of 3.4%. Feels it has moved up because there could be additional spinoffs and activity in the company. Not a growth company at this point. At some time he could see himself rotating out of this to find more cyclical names or more economically sensitive names but for now he will continue to hold.

Great trend. A lot of places to have support. Just this month it broke out on a monthly basis. So it says we are into a very large long-term move. A long term hold.

Has done well. Good dividend as people search for yield. A huge percentage of drugs are going off patent over the next few years. In their case, Lipitor has gone off. You see quarterly drops in Lipitor revenues of 30-50%. Drugs going off patents will be dropping and the market will anticipate that. He looks for things that have a little more of a leadership role. He is a GARP investor. PFE does not qualify for his approach to investing.

On the longer-term perspective, all the drug makers are moving. Expects a secular out-performance for the next 5-10 years. Great dividend. Fantastic low beta and positive demographics.

(Market Call Minute) Prefers JNJ-N, because they have other businesses than Pharma that help support the stock when Pharma is poor.

The big struggle here has been growing revenue. Have grown profits through cost cutting. A few years ago did a huge merger which was really just a cost-cutting exercise. Unfortunately, the way US legislation is designed, when these drugs go off patent they lose a lot of share. Investors are being lured in by the dividend and what they view as a stable company. Be very careful.

If there is a recession, drug companies will tend to do well. They are defensive plays. This one has a reasonably decent pipeline. Pretty good, strong balance sheet and will be able to keep the dividend and possibly increase it over time.

Breaking the company up and making it a little bit smaller so the drug discovery has more impact on the story. Good balance sheet. 3.4% dividend.

All the drugs stocks are now moving. His model price is $29.77 giving it a 17.5% upside. 3.5% dividend yield.

(Top Pick Sept. 23/11, Up 47.13%)

Most of the patent expirations have already occurred and there are no significant ones in the near-term. Good dividend. Defensive business model. In the process of spinning off some assets. Very low expectations for the business development and pipeline so should there be any success in those areas, you should see the stock continue to work. 3.7% dividend.

A lot of pharmaceutical companies went through a period where they had incredibly wonderful drug product lines coming through. Were treated as though they were biotech companies and were given huge massive multiples because their products coming out where multibillion-dollar products. The reality is that pharmaceuticals come out with smaller products and these companies have been re-rated. Feels the stocks are cheap at 10X earnings with a very good dividend yield. Has the opportunity to grow at a reasonable rate.

Likes it. Slow and steady growth. Lots of cash and would benefit from an acquisition. Have proven themselves very good at execution. They lost Lipitor earlier in the year and managed to hold on to quite a good market share. It is inexpensive, as are all of those in the space. Big cash balance. 3.2% dividend.

Pharma space has been a tough slog for so many years. Lipitor represents 20% of their entire company sales. When off patent, it becomes generic competition. Last quarter Lipitor sales were down 53%. Company produces a lot of cash, but it doesn’t produce a lot of growth.