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Pfizer Inc. Message Board

  • warwick1727 warwick1727 Mar 30, 2010 10:25 PM Flag

    When PFE gets a normal S&P valuation

    PFE's current and forward P/E is 7 1/2. Whenever the street decides a steady business and a dividend over 4% is worth AT LEAST the standard 15 P/E of the normal S&P stock that would give PFE a price of 35. Drugs are out of favor now. NOW I repeat NOW is the time to buy them not when they are in favor and trading in favor.

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    • Finally, we agree on something.

    • Pfizer traded at 13 times earnings in 2007 when they still faced a lustrum of big, looming patent expirations and almost no growth.

      So if it can sell at 13 times earnings under wuch crummy prospects, why in the world wouldn't it sell at least at that valuation with the future so much brighter once beyond the patent expiration cliff and having so few big expiries thereaafter? And with boomers turning 65 like crazy at that time as well?

      As In said, PFE will sell for at least a 13 multiple in 2012 unless we are in some kind of new paradigm. Because there isn't a year from 1942 through 2007 when Pfizer wasn't at least 13 times earnings sometime during the year.

      Top-notch blue-chip pharmas with expected growth of 8% or more simply don't sell for multiples much less than 13.

      BMY faces a huge patent expiration cliff but even now it's selling for over 14 times their 2013 expectation. It iksn't even as if their dividend is all that much better than PFE either.

    • Yes, I now finally after all these years of loss piling upon loss realize that even a P/E of 13 is way too much to ask, let alone the much higher valuations & prices I expected previously.

      PFE will be lucky to trade at eight times forward earnings in 2012. I should thank my lucky stars if I can unload it then at $22 instead of $17; $29 is a crazier pipe dream in 2013 than was $35 in 2005.

    • Here is an excerpt from your post:


      I never thought it would go bust so I began semi serious buying around 30



      Who ever thought that AIG would essentially go bust? At one time it had the second-highest market cap in the world. It too had been paying dividends practically forever.

      And who really thought three years ago that GM would go belly up? It wasn't all that many years before that savvy billionaire financier Kirk Kerkorian offered over $30 apiece for a chunk of the shares.

      Alkl of the big brokerages essentially failed as well - Bear Stearns, Lehman Bros. and Merrill Lynch. Who woudda thunk that? Bear survived the Great Depression but it couldn't survive the Great Recession. This was truly a market crash not seen since the early '30's and indeed the second-worst crash in the 114-year annals of the Dow Jones Industrial Average.

      I'm expecting nonmiracles from Pfizer - just a return to valuations at market lows equal to the lowest valuation seen from 1942 through 2007 at other nmarket bottoms.

      Is that really too much to ask? Duri9ng that 65-year stretch, the stock was never once valued at less than 10 times earnings. That being the case and with the stock for at least the last 28 years having no narrower a closing range than 23.7, it means that at market highs the stock would at least sell at 12.4 times earnings. And with $2.30 a share expected for 2013, it means that PFE would indeed be nearing $29 and my million-dollar options cashout.

      right now, PFE is looked at as being a very slow earnings grower - Yahoo is showing less than 2% annualized. but that is a very TEMPORARY situation being caused only by the once-in-a-lifetime Lipitor expiration plus a few other blockbusters in 2011/2012 as well.

      But once beyond the patent-expiration cliff, PFE's growth won't logically be stopped short of 8% a year - with almost 40% of that growth coming merely from the stock buybacks.

      When there is widespread realization that PFE really is nearly a double-digit grower and not a 2% grower, the multiple should at least get back to what it was prior to the crash.

      This is so obvious to me and such an incredible opportunity that I don't at all mind if this is "dead money" for another several months or even a year. Among other things, my methods allow me to earn 20% type of returns even with a completely dormant stock.

      As for risk, there sure wouldn't appear to be much of it with $2.20- or more in earnings as far as the eye can see and a dividend which is only 1/3 of earnings. After Lipitor, PFE will have no single franchise doing even as much as 9% of annual revenues - which makes for tremendous safety in the diversity. Even if an established product is yanked off the market for safety reasons, it won't destroy the stock.

      At these stock prices, I'm feeling almost invincible and i'm waiting patiently for the analysts to start seeing what I see now regarding the post-Lipitor years.

      This is a situation almost never seen in a major blue-chip stock - analysts so totally blind that they just can't see the big growth that will be coming into play in just a few years now.

      All it takes is ONE stock to make a killing in the market and I'm just positive I have it now with Pfizer. I'll now just sit back and bide my time and wait for the riches to come to me.

    • It dropped to 6.66 in March 2009. I did see it drop 85% from the top on a few of my shares. I never thought it would go bust so I began semi serious buying around 30 and I continue today. If it gets gack to 35 I will stop buying. If you go back to the peak just after the 3 for one split, it did go down more than 86%. It is now my largest stock holding. If I am wrong, I am screwed but I have faith. It is not every company that has paid a divy since the 19th century. They plan to increase it again next year.

      Unlike you, I expect no miracles, just a steady gain with a good divy. I don't know it will happen, I just think it will.

    • This was truly a once-in-a-lifetime market crash. You sure didn't see GE lose 86% of its value top to bottom in that one.

      There were some big hitters that thought that GE was headed the way of AIG near the bottom of the crash. I was just floored when the stock got as low a $12 or so and then came just a torrent of sales of 2.5-strike GE put LEAPS. Yes - you read that right - TWO POINT FIVE puts. near the bottom, they actually sold for something like $60 bucks a contract and they were selling in SIZE that you wouldn't believe.

      Somebody had many millions bet that the stock would be going bust.

    • I thought the same thing about two years ago. I was wrong. I already own this dog and I will keep it but I don't agree this is the time to buy more. I expect a PE of not more than 8 next year and lower after that. The PE will go up when the market perceives significant growth.

      • 1 Reply to carolharold123
      • I don't know exactly when the analysts will finally get beyond the Lipitor expiration but at some point they will and when they do, they will see the almost-certain 8% or greater average annual growth that will start off each year with 3% growth just from stock buybacks.

        The reward is way too great to worry about the possibility of "dead money" for another six to twelve months.

        Besides, I have superior options methods working for me and I will earn 20% or more per year even if the stock does nothing more than stand still.

        If Pfizer is $29 or more in 33 months as I fully expect, the Million-Dollar Mulligan will more than quadruple from here and really will be worth a million dollars.

    • chrt13sezzheaintkowshit chrt13sezzheaintkowshit Mar 30, 2010 11:00 PM Flag

      My betters have informed & educated me that the mean S&P P/E, now 14.4, isn't meaningful.

      It includes companies with P/Es of 100 to 15,000, which tends to skew the arithmetic average.

      About 85 of the 500 have no earnings.

      PFE's real P/E, based upon trailing GAAP earnings, is close to the average, anyway, at 14.10. As my betters have taught me, since PFE has "one time" charges every quarter, GAAP is the way to go. Follow the Street. That's what fund managers, whose opinions count, look at.

 
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