Except for a few days in early 2009, it has never been dumb to short PFE since April 1999.
What strikes me as dumb is going long PFE. Why people keep making that countertrend move except at decade lows is beyond me.
Every few months a new batch of hopeful longs shows up here, imagining PFE "undervalued". It never is, again except for those few days last year.
IMO it's a buy under $14 & a strong buy under $12, same as in 2009.
Not as good as you might think since it would have been well known that the company faced major expirations from late 2004 on - including Diflucan and Neurontin in 2004, Zithromax in 2005 and Zoloft in 2006. In addition, the company was still two years away from the PHA acquisition in 2001 and nobody at that time was assuming that PFE would be buying them.
Without PHA, Pfizer never would have posted the kind of earnings it did in 2003 and 2004.
Pfizer was only destined to earn $1.31 a share in 2001; no way should it ever have been a $45 stock that year which is 34 times earnings.
Here is an excerpt from your post:
Hard to say what 2014 & 2015 will bring, but Chartnuts imagines he can tell you to the penny.
I hardly expect to predict anything to the penny; all I'm after is to be ballpark.
Is outsized earnings growth for the year 2014 REALLY that hard to envision when you know that between October 2012 and November 2014 there isn't a single new patent expiration and that by the end of 2013, most of the damage will already have been done for drugs losing patent protection in 2011 and 2012 and that there just won't be that much more to lose in 2014?
Ther are ALWAYS going to be natural additived factors such as annual drug price hikes, population growth, intgernational expansion and the like. In normal years of moderate to high expirations, earnings growth is held down because of that key subtractive factor.
But what's going to hold earnings down when there are almost no expirations? And then management buys back 3% or so of the stock to boot.
Prdicting ballpark earnings just isn't that tough for big pharma companies when you look carefully at the patent expiration schedule. Because that is far and away the most important determinant of earnings - NOT new product removals.
It's no coincidence that BMY is doing so well now in the almost total absence of big expirations whereas after 2011 it's expected to turn back into the earnings pumpkin that it was in 2004-2006 when it was plagued with divestitures and big patent expiries.
Pfizer management is expecting around $2.30 in 2012 and likely a little more in 2013. But then with very few patent expiration losses, great demographics and the resumption of stock buybacks, earnings can't do anything but soar.
I expect $2.25 in 2012, $2.30 in 2013, $2.60 in 2014 and $2.80 or more in 2015. It's easier to be in the ballpark with respect to out-year earnings than almost any other industry since the patent expiration schedule is such a dominant determinant.
I have had the same $2.25 or $2.30 estimate for 2012 for Pfizer for almost two years now and there is little that could really move the needle much.
I would bet big money that 2015 earnings will be a helluva lot closer to $3 than $2. The patent expiration schedule doesn't lie. Pfizer has been punished by that schedule starting with 2005 but post-Lipitor, it's Pfizer's best friend.
It's the subtractive factors that counteract the positive revenue factors that always exist. But when the subtractive factors are held to a minimum, earnings are free to grow apace and that goes in spades when there are stock buybacks.
Your logic is very poor. If PFE is earning $2.20 or more for the next several years, at 10 times earnings it should be at $ 22 right now. Even if growth is flat for the next few years it should still be at $ 22.What has 2015 earnings got to do with anything. Nobody can accurately predict what will happen in 5 years.
LLY and PFE were the only big domestic pharmas to gain during the week.
LLY of course is the basket case of the pharma sector with earnings per share expected to plunge from $4.76 in 2011 to $3.25 in 2014. That's almost 1/3 off the top in three years; hardly a trivial decline.
Pfizer is only a couple of pennies behind ABT and MRK today. However, PFE won't likely make it four sessions in a row of sector outperformance as some of the Europeans are kicking ass today.
No shit, Sherlock!
Except for huge year long winner NVO, they're all whipping PFE's ass badly today again: