tag:blogger.com,1999:blog-4241416962008169508.post6116411957674346342..comments2024-03-27T21:03:58.972-04:00Comments on Just A Life Sciences Blog...: A More-Selective "Dow Dogs" Strategem For 2011: Pick Pfizer, Over MerckUnknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-4241416962008169508.post-6254680355050736212011-01-02T00:33:48.176-05:002011-01-02T00:33:48.176-05:00First -- yes, Lipitor comes off patent in 2011 -- ...First -- yes, Lipitor comes off patent in 2011 -- but that has been so completely vetted on Wall Street (and Main Street), that it is VERY likely fully-priced in at $17, on the NYSE. So, that would appear to be of little moment, now.<br /><br />And actually -- if one is inclined to look at P/Es, one should look at the more RELEVANT P/E ratios -- Pfizer's <b>forward</b> P/E is more like 7.65; compare to Merck's <a href="http://finance.yahoo.com/q/ks?s=MRK+Key+Statistics" rel="nofollow">forward P/E of 9.46</a> (per the Yahoo! stock boards). So -- Merck looks overpriced <i>vis-a-vis</i> Pfizer, on forward P/Es.<br /><br />In fact, using the <b>past</b> P/E for Pfizer (as you have) is to expect that Lipitor's earnings will continue on in the future -- as they have in the past (@ ~$11 billion a year). <br /><br />So, it is no wonder that the trailing P/E is where it is. The past earnings reflected Lipitor, and the Wyeth transaction. If you decide to use <b>trailing</b> P/E, in this case, you will be misled -- as to the future, with such a fundamental shift coming.<br /><br />I'd also note that -- at anything under $17 -- Pfizer looks like a steal (even as we expect the disappearance of Lipitor earnings).<br /><br />Merck at $36, OTOH, looks to be <b>fully valued</b>. Its forward P/E tells you so.<br /><br />Namaste, and do stop back!condorhttps://www.blogger.com/profile/11014613306197942748noreply@blogger.comtag:blogger.com,1999:blog-4241416962008169508.post-30727588653585110942011-01-01T20:21:13.596-05:002011-01-01T20:21:13.596-05:00Merck ~12 PE ratio
Pfizer ~25 PE ratio
Do the mat...Merck ~12 PE ratio<br />Pfizer ~25 PE ratio<br /><br />Do the math...<br /><br />I don't think you need to concern yourselves with Pfizer going up. <br /><br />Isn't Liptor off patent in 2011?Anonymousnoreply@blogger.com