Who needs a 0.5% CD when you can buy PFE yielding north of 4%? Plus another dividend increase coming soon. Anyone see a negative near-term event or board/management decision that could shake the 'safeness' of this stock?
Through the leverage involved in owning deep in the money, long-term options such as the 13-strikes for Jan. 2014 and writing covered calls against them, I have increased the value of my Pfizer holdings from 261K at year-end 2010 to 482K at year-end 2011 to 721K currently.
While the stock has risen from $17.61 at year-end 2011 to $25.56 now, the value of my holdings has almost TRIPLED. Using superior options methods is everything.
Don't feel badly though - at least you have been earning your pittance in bonds.
The only thing I am worried about are the layoffs they will announce for the US sales team on the 20th. I am very worried as to why they would not give an exact number. Usually that means a lot more than they want the public to know. The stock go hit hard when they mentioned they were getting rid of 300 drug reps in Canada due to declining sales and market share. To play it safe, I am planning on selling probably on the 18th of Dec (going to lock in my 15% cap gains tax) and will buy back after they make the announcement on the 20th. If it turns out they are getting rid of half their sales force, that will be really bad. I waiting to buy in after that. Also, it looks like an insider just sold 100k shares, that is not a good short term sign either. However, with 10 billion set to buy back shares, we should have a stable 2013. Just remember, the stock is at a 5 year high and has basically doubled over the past two years on declining revenue, there could be a small pullback.