I'm Long on PFE for the simple reason aging baby boomers as we get older will need more and more drugs to "maintain a healthy" lifestyle. It pays a nice dividend also and this will most likely increase with time.The stock is still cheap compared to other big pharma stocks. Good luck to all fellow longs. It doesn't bother me that some upper management have sold. If you look at the price they got it's continued to go up over $1/share from their sales. Wouldn't be surprised if this stock trades at $33+ a share by the end of the year.
I have been one of Pfizer's biggest bulls the last eight years but I must say that it's the ninth inning now regarding my investment in the stock; I'm on my way out. The stock was a helluva bargain when it was at eight or nine time earnings with a dividend yield in the 4% to 5% area but now the stock is approaching 13 times earnings and the dividend yield is down to a pedestrian 3.3%.
Morevover, where I once saw resaonable internal growth, I no longer see it. Growth has been compromised by European austerity where the governments call all the shots regarding pricing. The on ly growth Pfizer has now is due to stock buybacks - not to internal grwoth. Moreover, I can see that in this country, it's only a matter of time until there is "negotiated " medicare prices with the government. Something clearly has to be done about some of these out-of-control entitlement costs.
Yes - Pfizer is still cheap relative to other big pharmas but the fact is that the pharma group has been stronger than it deserves to be and the stocks are already fairly priced and now starting to get overpriced.
Pfizer's consensus earnings story is as follows:
$2.19 in 2012 (actual)
$2.28 in 2013 (consensus)
$2.36 in 2014 (consensus)
$2.46 in 2015 (consensus)
This pro0gression is far from exciting and even that meager expected growth will be due entirely to stock buybacks and not internal growth. I just can't continue being very enthused over a 5% average annual dividend grower selling for 13 times earnings when I see tech stocks like AAPL and BIDU selling for half the multiple of their growth rates. For me, it's time to start making the switch.
You are quite right in your assessment as you are most of the time, however you fail to understand that Pfizer is not a Company that will sit on its laurels and twiddle its thumbs. They are currently buying some of their stock back and will at some time acquire small biomed Companies to supplement their bottom line.