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Pfizer Inc. Message Board

  • chrttwelve chrttwelve Nov 6, 2010 10:41 AM Flag

    Putting the lie once again to notions that PFE moves with the market

    Pfizer outperformance ended on September 15 with the stock at $17.27 and the benchmark index at 1,125.

    Since that date, the stock is down by 0.5% (up 0.5% dividend-adjusted) while the S & P has tacked on 101 points or 9.0% to 1,226 (9.3% dividend-adjusted).

    And yet nothing exactly devastating has happened to Pfizer. They beat earnings by three cents a share, raised full-year estimates, reaffirmed 2012 targets, acquired KG and Brazilian and Indian generics firms and bought back $0.5B of their shares. The euro has surged as well.

    Despite the protestations of the likes of hotpanera2, there are simply going to be periods when sectors or stocks are out of favor and the reasons are far from apparent.

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    • Proof that wall street does indeed accept gaap earnings, which were less than stellar. Your foolish belief that "adjusted earnings" are accepted by investors is similar to your other fantasies.

    • For anybody who understands numbers beyond arithmetic, it is obvious that since a substantial % of Pfe's volume is traded in accordance with the S&P, for there to be a large divergence in performance something has to be pushing the remaining volume in a very different direction than the index.

      The recent underperformance of pharma stocks, including Pfe, has been driven by a number of factors, including:

      1. The election results increase the chances that Obamacare will not take effect in 2014 as currently constituted. Since pharma stocks rallied on its passage on the theory that there will be more demand for drugs paid in large part with government subsidies with not very onerous requirements on big pharma, the possible repeal in 2013 or at least major unclear changes removed those positives and caused a knee-jerk sell-off in pharma stocks. The market abhors uncertainty.

      2. While in this post you praise earnings to remove that as a cause for the decline, as we all know intellectual honesty is not your thing. Here is what you wrote when the earnings came out:

      <<Not every single quarter can be stunning. The previous two quarters were indeed stunning. This one though was just so-so on balance.

      Costs continue to be very much under control and I liked the $500M stock back and three-cent earnings beat.

      However, revenues missed by half a billion with international revenues disappointing the most. It looks like the European austerity programs and hold-the-line pricing over there pinched a little more than expected>>.

      You were correct then. The earnings were not stunning. Having run up ahead of them, selling on the tepid news was hardly a surprise.

      3. When the market runs up quickly, defensive areas like staples and pharma usually underperform.

      None of this can alter the irrefutable logic: every day a large % of Pfe shares trade with the index and, much more so than for a stock that is not a large component of the index, it is difficult, though not impossible, for it to trade in a non-correlated fashion. You will not find many days when the index rises and Pfe falls for this reason. Sometimes, though, specific reasons exist for a divergence. I have given 3 of them above.

      • 3 Replies to hotpanera2
      • Here is an excerpt from your post:


        revenues missed by half a billion with international revenues disappointing the most. It looks like the European austerity programs and hold-the-line pricing over there pinched a little more than expected>>.

        You were correct then. The earnings were not stunning. Having run up ahead of them, selling on the tepid news was hardly a surprise.




        1) Of the $500M revenue miss for the quarter, about $200M was due to greater-than-expected Lipitor reductions following loss of exclusivity in Canada and Spain. And while this is an earnings negative in 2010, Pfizer STILL did better than consensus earnings-wise. Also, less-than-expected Lipitor revenues this year in Canada and Spain will hardly affect earnings in 2012 and beyond when most of the revenues would have been lost in any case. Lipitor is the past for Pfizer - not the future. In analyzing the future for Pfizer, I'm hardly swayed by short-term shortfalls in 2010 and possibly 2011 for Lipitor.

        2) Even for you, calling the pre-dividend advance from $17.28 to $17.62 "a run-up" is a bit much. In actual fact, that advance of just 1.9 times the amount of the quarterly dividend is LESS than the usual advance of about 3 times the dividend.

      • Here is an excerpt from your post:


        1. The election results increase the chances that Obamacare will not take effect in 2014 as currently constituted. Since pharma stocks rallied on its passage on the theory that there will be more demand for drugs paid in large part with government subsidies with not very onerous requirements on big pharma, the possible repeal in 2013 or at least major unclear changes removed those positives and caused a knee-jerk sell-off in pharma stocks. The market abhors uncertainty



        As usual, you play very fast and loose with the facts. For starters, take your assertion that pharma stocks rallied on Obamacare passage and that the election results now threaten it.

        WHEN, pray tell, did pharma stocks rally on Obamacare passage? Passage was on March 19. Did you even bother to look at a chart of pharma for the four months AFTER March 19? Pfizer for example closed at $17.48 on March 5, just two weeks before final passage and when it was obvious to all that the Dems would be successful in ramming it through via "reconciliation." On July 2, however, Pfizer had plunged to a close of $14.14. WHERE IS THIS RALLY ON PASSAGE that you were blathering about?

        In actual fact, fears about the plunging euro and about European austerity completely took away the positives for the drugmakers of Obamacare being passed. The pharmas have lagged the market badly all year and that has only intensified the last several weeks.

        But hey - don't let a little thing like the facts stand in the way of your assertions.

      • Here is an excerpt from your post:


        it is obvious that since a substantial % of Pfe's volume is traded in accordance with the S&P, for there to be a large divergence in performance something has to be pushing the remaining volume in a very different direction than the index.



        That "something" includes:

        1) Undue focus on the Lipitor expiry even though Pfizer has taken major steps to mitigate the negative effects.

        2) Inability of the analysts to get beyond Lipitor and to see how few drugs lose exclusivity after September 2012.

        3) Complete downplaying of the company's pipeline which includes such major drugs as Prevnar-13 for adults, Bapi for Alzheimer's, Macugen for diabetic macular edema, Tasocitinib for rheumatoid arthritis, Apixiban for blood clots, Crizotinib for targeted lung cancer and Axitinib.

        Some of them might not make it in the end but this is quite an assortment of potential mega-blockbusters here that just aren't being given much weight.

    • Completely amazed at your predictions.

      You claimed that Pfizer would beat third quarter estimates and they did as well as being in line to earn in the area of 66B to 67B for 2012 despite the loss of Lipitor. Right on once again with a host of other prognostications you make that seem to baffle many here on this board.

      Oh well, when one's intent is to achieve a goal, it's of utmost importance to be up to snuff on all aspects of likelihoods with this Company. You predicted share buybacks, small promising biotech purchases among a host of other accurate forecasts too numerous to mention.

      Keep up the good work. We appreciate your dedication to feeding the readers with quality material.

    • Did you perhaps notice that after mid-Sep it became obvious that Pelosi would lose hugely & that Obamacare, along with PFE's corrupt bargain on behalf of Big Pharma, would face destruction?

 
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