[U] Let Me Say It Clearly, If In Passing: Merck Is Over-Sold, Here -- Down 10% Makes No Sense.

Several outlets wrote truthfully, but incompletely (in my view, at least) today (whilst I was busily dissecting -- and enjoying every bit of -- the manifold early Christmas presents embedded in plea agreements and indictments) that Kenilworth has suffered its worst three day decline since February of 2009.

In truth, I was mostly covering Schering-Plough then, and only covering Merck insofar as its co-marketing of Vytorin/Zetia impacted Schering-Plough. Even so, I feel very comfortable saying that Merck will be above $62 per share on the NYSE -- before you sit down to carve your turkey. The news (unless something major comes out* between now and then) simply doesn't warrant a 10 per cent haircut, since Q3 2017 results were announced.

Almost all of Merck's franchises are fundamentally solid; its immuno oncology franchises are propagating literally a tidal wave of cash, quarter by quarter. In sum, it is a far better company than it was in February 2009, and its US marketplace is more likely to be favorably reimbursed than it has been in a long while -- the EU is looking up as well, as Brexit is likely stalled into 2020.

I don't think I've ever -- not even once, in a decade -- made a buy recommendation on Merck here. But Mr. Frazier is clearly someone to bet on; go buy Merck at $55, tomorrow. It has been banged down largely unfairly. It is undervalued here -- so buy some. Mark my words.

I will now hush -- but do trust me here. This is not a stock touting site -- as anyone who's been with me for a decade knows -- the [updated and improved] graphic at right makes plain why I write. . . what I write, tonight.

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^{* I will candidly confirm that for Merck, Pfizer, Apple and Microsoft (among many other similar companies domiciled in the US) -- as Mr. Trump's chances of staying in office decline, so too do the chances of an immense windfall for these multinationals, in the form of a repatriation tax holiday. [Merck has some $70 billion parked overseas -- while Apple has triple that -- what could Merck invest in, with $70 billion, nearly tax free? But that is all simply a one time tax gimmick.] All boats will be equally lifted if meaningful corporate level tax rate change occurs, but I think that increasingly unlikely, if (as I see it, at least) the presidency is now engulfed in a legal and moral crisis (not unlike Nixon in 1973). But the absence of a windfall at the tax line in no manner cuts against the fundamentally solid cash flow Merck is throwing off -- at more than a billion and change per quarter now, from Keytruda alone. That will almost certainly continue for at least ten more quarters.}

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