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Pfizer Inc. Message Board

  • chrt13 chrt13 Sep 7, 2007 7:20 PM Flag

    How my 100K investment in Pfizer is faring


    Starting point - 100,000 on 11/17/04 with the stock at $27.99. Low-water mark was $31,650 with the stock at a 98-month closing low of $20.60 on 12/9/05. The high point before this calendar year was $181,645 with the stock at $28.47 on 9/20/06.

    12/01 - 180,300 ($27.86)
    12/04 - 098,985 ($24.90) Torcetrapib failure
    12/20 - 136,230 ($26.21)
    12/29 - 128,925 ($25.90) Year-end 2006 close
    01/19 - 157,645 ($27.22) Session before Q4-06 earnings
    01/22 - 155,030 ($26.95) Q4-06 earnings released
    01/23 - 143,400 ($26.37)
    01/24 - 154,145 ($26.82)
    01/29 - 136,040 ($26.06)
    02/05 - 156,390 ($26.88)
    02/07 - 154,240 ($26.52) Ex-dividend 29 cents
    02/12 - 147,595 ($26.22)
    02/14 - 156,970 ($26.58)
    02/26 - 139,465 ($25.84)
    02/27 - 119,990 ($25.14) 416-point Dow plunge
    03/05 - 106,875 ($24.70)
    03/09 - 127,390 ($25.41)
    03/14 - 110,045 ($24.86) Successful test of 3/5 low
    03/21 - 140,440 ($25.85)
    03/28 - 120,865 ($25.18) Last session before 10% Dow gain
    04/20 - 171,060 ($26.97) Session before Q1-07 earnings
    04/23 - 153,435 ($26.35) Q1-07 earnings released
    04/24 - 148,870 ($26.15)
    05/07 - 181,330 ($27.38)
    05/09 - 182,725 ($27.16) Ex-dividend 29 cents
    05/10 - 173,120 ($26.80)
    06/01 - 196,065 ($27.68) Closing high for 2007 to date
    06/07 - 157,150 ($26.29) Dow falls 410 points in 3 sessions
    06/08 - 164,855 ($26.52)
    06/12 - 154,950 ($26.11)
    06/15 - 166,485 ($26.47)
    06/20 - 142,370 ($25.71)
    06/21 - 150,580 ($25.92)
    06/25 - 133,045 ($25.40) Height of hedge fund jitters
    07/05 - 148,130 ($25.90)
    07/11 - 133,885 ($25.45)
    07/16 - 153,140 ($26.08)
    07/17 - 152,000 ($25.96) Session before Q2 earnings
    07/18 - 121,690 ($25.13) Q2 earnings released
    07/31 - 064,285 ($23.51) Dow falls by 5.63% since 7/19
    08/02 - 076,350 ($23.85)
    08/03 - 064,460 ($23.51)
    08/08 - 110,685 ($24.61) Ex-dividend 29 cents
    08/16 - 069,210 ($23.39) Closing low for 2007
    08/24 - 113,760 ($24.74)
    08/28 - 103,710 ($24.47)
    09/04 - 124,655 ($25.08)
    09/06 - 109,575 ($24.62)
    09/07 - 094,620 ($24.25)

    For 2007 to date, the investment is down by 26.6% ($34,305) on a 3.1% decrease in the stock price including three 29-cent dividends.

    This investment is highly-leveraged to the point where I earn about six times what a buy-and-hold investor does up to $27.50. Between $27.51 and $30, I earn about three-and-a-half times what a buy-and-hold investor does. However, I still earn a decent return if the stock does nothing at all (20 to 25% earned per year) and I only get hurt somewhat should the stock really tank. In that case, I would lose over time something like two-and-a-half times that of a buy-and-hold investor. That would be on paper. In order to truly be saddled with that loss, the stock would have to stay down for over a year.

    My current breakeven is down to $24.40. Every point between $25.00 and $27.50 means about 40K over time. Over $27.50, every point means about 24K.

    With the stock at the same closing price as it is now ($24.25) at March options expiration, I would be able to cash out for 93K.

    If Pfizer is $27.50 at March expiration, I would likely be able to cash out for 228K factoring in the effects of remaining rollovers.

    If Pfizer is $30 at March expiration, the cashout value would grow to 288K.

    If Pfizer is $31 in mid-January 2009, I will be able to cash out for at least 350K.

    This topic is deleted.
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    • Eight months of evolving idiocy.
      Note the subtle relentless warping of reality to fit the Faery Tale.

      7-Sep-07 07:20 pm:

      Starting point - 100,000 on 11/17/04 with the stock at $27.99.

      Low-water mark was $31,650 with the stock at a 98-month closing low of $20.60 on 12/9/05

      10-Apr-08 05:41 am:

      With the stock at the same closing price as it is now ($20.89) at January options expiration, the investment would be valued at negative 14K

      [stock 29 cents higher, nads $45k lower]

      In perpetuity:

      However, I still earn a decent return if the stock does nothing at all (20 to 25% earned per year).

      7-Sep-07 07:20 pm:

      With the stock at the same closing price as it is now ($24.25) at March options expiration, I would be able to cash out for 93K

      10-Apr-08 05:41 am:

      With the stock at the same closing price as it is now ($20.89) at January options expiration, the investment would be valued at negative 14K.

      7-Sep-07 07:20 pm:

      Every point between $25.00 and $27.50 means about 40K over time

      10-Apr-08 05:41 am:

      Every point below $25.00 means about 35K over time.

      7-Sep-07 07:20 pm:

      If Pfizer is $27.50 at March expiration, I would likely be able to cash out for 228K factoring in the effects of remaining rollovers

      10-Apr-08 05:41 am:

      If Pfizer is $25.00 at January expiration, I will be able to cash out for 130K factoring in the anticipated effects of remaining rollovers.

      "That is a record projection for a $25 stock price."

      That is the kind of empty boast found in the CEO's introductory letter to the annual report of a company one should not invest in.

      and some hilarious oneliners:

      02/27 - 119,990 ($25.14) 416-point Dow plunge [DOW then 12,216.24]

      03/14 - 110,045 ($24.86) Successful test of 3/5 low

      06/25 - 133,045 ($25.40) Height of hedge fund jitters

      How far off is it from the day nads dumps the whole mess to buy a b*ttload of 20 puts;

      brags about his new breakeven point where pfizzle falls to 18.50;

      then Bill Gates buys pfizzle for thirty bucks so he can take viagra private and be the only AARP member with a three hour erection*

      Well, that tale IS just as believable.

      *consult your doctor immediately

    • Charty, sorry about the Torcetrapib mistake. 2006 to 2009 would be three years, slightly less dramatic than 4 years.

      Your number analysis is always compelling. But I think it proves HotPanera's point that there is a "Kindler discount" on the PFE stock price for all the reasons he mentioned. It is the stock price which interests most people here. We know what a solid company Pfizer is. There is no other explanation than Wall Street perceptions. They know the numbers as well as you do.

      Your point is an aggressive div hike in 2008 and 2009 (let's call it a bandaid strategy to treat a gunshot wound to the gut)will move the stock to a level where it can be used to acquire a WYE or AMGN if they are still available, a big if. Again, you admit this strategy will probably frustrate many investors short term. OK.. at least you are realistic. Appeasing their frustration level will keep you busy in your retirement.

      The only comment I have is with your bandaid dividend strategy of $0.20 hike in 2008 and 2009, you are cofident that this will move the stock price up by 52% to $37 or so(with a Democratic President risk). A $30 stock price means a 24% increase from today. Those are big numbers (I know the multiples, no need to explain them again). What I think of the possibility of this happening is immaterial. I just hope it happens. Other investors can decide the probability themselves but the market will have to change its perceptions dramatically.

    • <Most retirees want 8 to 10% on their investments but many will settle for 5%. When they can't get even 5% though in CD's, it's good for a solid quality company like Pfizer - especially when the PFE dividend approaches the magic 5%.>
      I totally agree. Since it is recommended that retirees take about 4% of their IRA per year, a 5% dividend means you would not have to eat into the principle. With the Baby Boomers just beginning to enter the retirement world, we can expect to see them turn to stocks like Pfizer to meet their needs. Of course there is always a possibility that PFE will cut the dividend, but more likely they will contine raising the dividend as they have done for the past 40 years.

    • Your points are well taken re. Lilly but I do not follow this stock so closely. Still can't understand BMY price without the takeout premium. Maybe the simple answer is they will have their crisis in due course. Torcetrapib got pulled I think in late 2005? 2 years ago. Everyone knows there is no easy fix but, hell,these guys are supposed to be studs and there is really only 1 issue at Pfizer - Lipitor patent expiration. Duh!

      But let's stay focused on Pfizer. Your post implies that the solution to the problem, i.e. an aggressive move to reassure shareholders that there is a revenue replacement stream for Lipitor from 2011, lies in a $0.20 annual dividend hike in 2008 and 2009. You imply that Kindler
      should do nothing out of the ordinary after more than 4 years to robustly address the situation, the travesty that imperiled the company's future and got Hank the boot.
      Forgive me but it takes more college than I have to see the smartness in that. BTW, all the expense cuts are no brainers and to me is business as usual. Hiring a GSK retread to revisit all the biotechs she missed the first time is also underwhelming.
      Even you can understand how a nervous Street will not get behind Pfizer when there is no catalyst for 2 more years, if then. In any case time will tell if two div hikes will move the stock up by 25% to just above 30. As Frank Loesser (Guys and Dolls) wrote "..there is room for doubt..." in the current market environment.

    • 1. Commercial paper makes up the bulk of money market funds. You're, therefore, totally wrong that commercial paper rates don't matter. Money market rates are RISING and that's a negative for Pfe competing with its dividend. But, more important, you ignore --yet again -- the fact that nobody will buy Pfe for the dividend if they expect the stock to decline. How you don't see that is beyond me. IF Treasury rates mattered, as you claim, Pfe should have risen last week as Treasury rates declined substantially. But people who want Treasurys, especially now, want complete safety, not obtainable with Pfe. So you won't be seeing that switch. The Fed Fund futures are a notoriously poor indicator of what will happen. Most smart people think 1/4 point is all that's coming on Sept. 18th. I'm hoping for 1/2, myself, but the dollar is a major concern to Bernanke. In any event, if money market rates stay above 5% because of the commercial paper market, CD rates declining won't much matter as far as Pfe is concerned.

      2. I have nothing to add to my previous comments. You continue to completely ignore the importance of how management is perceived as a key component of PE.

      3. Zetia works through the digestive system. However, that doesn't mean that only people with liver problems take it. Vytorin combines cholestorol lowering via both the liver and digestive system. People who take it don't just want a traditional statin. They obviously don't have liver problems, could just take one of the liver-mechanism statins, but choose to add Zetia as a complement to a traditional statin. I seriously doubt any effect from Lipitor going generic on those who choose a digestive-related cholestorol lowering agent. Just like Zocor going generic didn't hurt Zetia or Vytorin sales, and from what I understand, pricing.

      4. Are you unable to copy and paste a link? It's really very simple, even for a Luddite. I have no idea what you're talking about without seeing a link.

    • For what it is worth, I concur (legalese?) with your "Kindler discount" statement. It is a welcome relief to read such a straightforward explanation for the PFE malaise. The repeptitive posts about great cash flow, dividend hikes, 19 billion cash horde, etc., all of which are true, are getting real old as the stock remains in a narrow range frustrating the hell out of investors who see deep value. Not everyone is prepared to wait until 2012 or 2013 to make money.
      As you infer, it can only be the lack of a credible plan to replace revenues by the new guys that is holding PFE back. I also believe the Street will forgive the stock if they overpay for a credible Lipitor revenue solution. Kindler has to know this. Time to step up and do something now rather than later. Pfizer has a management issue for now but it is fast becoming a problem and will be a crisis by 2008 if the status stays quo on the strategy front.

    • 1.You are confusing money market and Treasuries. I don't know why you get such a low return, or what your cash is really invested in. My retirement money market account is Fidelity Cash Reserves. It pays 5.11%. (My taxable accounts use tax free money markets) Most money market funds are primarily invested in commercial paper, not treasuries. There are treasury-only funds, a small %, and they pay less. It will be much less soon when existing holdings are rolled over into lower yielding treasuries. People have been buying low-yield treasuries recently because they don't trust commercial paper. It is largely irrational, but true. Those people are not going to buy Pfe. It is silly to think that this flight to quality, all while commercial paper rates, Libor and other non-Treasury yields are rising, allows Pfe to yield less. It is just the opposite. Unlike you, I don't opine on subjects I know nothing about. You are out to lunch on this and really need to educate yourself.

      2. Investors are not happy with Kindler's m.o. That you think it is wise to wait to do a deal, is unimportant. My own view is that as an untested CEO approaching major challenges, he needs to do much more to inspire confidence and has failed miserably. You fail to address the quality of management perception effect on stock prices. That's a critical element which you ignore at your peril. Among other things, waiting until close to expiration of the patent will put pressure on him to do a deal when it may not be attractive, and other companies will take advantage of perceived desperation.

      3. I recall little focus years in advance on Zocor going generic hurting Lipitor. I know that when I first mentioned it, I had read nothing about it and you thought it was essentially small potatoes. Zetia and Vytorin, working very differently than Lipitor with its liver path and resulting risks, is not going to be materially affected by Lipitor going generic. Zocor is a direct competitor; not these drugs.

      4. I responded twice to your in-the-money strategy. You'll have to search for them.

    • "For 2007 to date, the investment is down by 26.6%"

      For 2007 to date, my investment is down 3.42%

      Listen to the Monkey!

    • You have now done worse over the past 34 months than if you had simply stuffed your money in a mattress.

      Superior methods indeed!

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