Pfizer Inc

PFE-N

A successful drug company that has made many acquisitions that have led to good value and promising drugs. Healthcare stocks are under pressure in general as the Trump Administration is threatening to bring down drug costs. He thinks this will end and you will make good money holding.

A long-term play. Low EPS growth of about 3.5-4%. Very large company. Don't have a lot of drugs that have exposure over 10%, except Prevnar. Not his favourite growth position. Diversity of assets. Need to do some M&A. Stable dividend. Only paying 15x. You can hold on to this.

A quality company that pays a good dividend. Look at it now during negative sentiment due to political pressure in America over high drug prices. Be cautious near-term, but do your homework on this now.

Healthcare in general has outperformed in every bear market. A lot of it comes from large cap pharma companies. He prefers LLY-N. But there is no question that this one is interesting and has good management.

It is a safe dividend play. He looks at total return so dividends are important but recommends you don’t get caught in a dividend trap where there is capital at risk. A lot of dividend payers have moved their valuations to historical high levels. You have to be careful.

He likes this group and PFE is one of the few that has tested support lines. This has big potential to return to the mid/high-$40s soon. He likes it here.

Great long base from 2015-18. The greater the base, the better the case. It broke out in mid-2018 and pulled back a bit. It looks healthy though. The chart looks encouraging.

He sees about 18% upside and likes the healthcare sector. Yield 3.43% (Analysts’ price target is $45.85)

Merck vs. Pfizer Two large pharma companies that are treading water. A lot of the drugs they develop are coming off patent. You must look at their pipelines, with Merck doing very well while Pfizer has some good franchises, like Lipitor. Merck likely has the better pipeline. Neither has enough revenue growth or cash flow to entice him to buy.

(A Top Pick Jan 10/18, Up 21%) This was the conservative pick. He thought it was oversold and it had a nice run back to where it is. He trimmed a little back and is not as positive on it now. They are going to pool their consumer product divisions with Glaxo. Probably 5-10% return this year.

They make their money by constantly cost cutting. When their drugs go off-patent then they need to find another to replace it. It is a leaky-boat story. When you look at the cost multiples, which he thinks are expensive, he would pass on this. He would consider bio-pharma instead.

2019 outlook? The US healthcare sector has been very defensive in this market; they're not as off other sectors. The sector went sideways during the 2016 US election campaign. PFE has announced the price of 40-50 of their drugs will be raised. Plenty of runway in this company. But in 2019, if there's a market recovery, money will flow out of healthcare and back into tech. But you're good to own this.

A defensive name. Revenues at $52 billion per year. ROE is going higher. Dividend yield is 3.0% and P/E is 15. Strong pipeline. (Analysts’ price target is $45.09)

Likes it. Diversified pharma. Good pipeline of assets that look robust. Trades at 15x earnings, which is reasonable. Slightly lower growth rate than peers but pays a good dividend. The chart looks fantastic and has benefited from the recent safety trade.

(A Top Pick Jan 10/18, Up 22%) Often last year's losers are this year's winners. This one he warmed up to when it had a good set-up. It is one of his main holdings in the healthcare space. They are becoming more innovative.