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Merk?
Old 01-28-2005, 02:20 PM   #1
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Merk?

Be still my beating heart!!

I swore off individual stocks a long time ago
but golly gee this bait looks tempting. P/E
around 12 and yield pushing 5%.

I hear Merk's pipe line is suspect but they
spend a bunch on R&D..... even blind hogs
and all that.

Lawsuits are looming also.

Is this fool's gold? Has the knife stopped falling?

Cheers,

Charlie
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Re: Merk?
Old 01-28-2005, 03:04 PM   #2
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Re: Merk?

At close today, the PE was 9.66.... Isn't that the magic number for some on this board? *

I too have an inactive Ameritrade account i'm thinking about dusting off just for this purpose. I do believe that they are a solid company, but have some problems for the near future. I have also heard that while MRK spends a lot on R&D, they don't have any "big" drugs in the near-term pipeline. This could become a problem for them, especially with courts invalidating some of their drug patents.

An AP news clipping-

"A federal court invalidated the patent on Friday for Merck & Co.'s second-largest selling drug, the blockbuster osteoporosis treatment Fosamax, in a decision that offers millions of patients hope for a cheaper version sooner, but darkens the company's already clouded outlook. The company also was hit with news that the federal Securities and Exchange Commission is starting a formal inquiry into its handling of arthritis blockbuster Vioxx, which it withdrew from the market last year after studies showed it increased the risk of heart attacks and strokes."
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Re: Merk?
Old 01-28-2005, 03:21 PM   #3
 
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Re: Merk?

"SOME problems" ?

JG
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Re: Merk?
Old 01-28-2005, 04:28 PM   #4
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Re: Merk?

Merck has to be a buy - all the local personal injury lawyers are running TV ads looking for people who took Vioxx.

Blood in the street and all that stuff - heh, heh, heh.
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Re: Merk?
Old 01-28-2005, 04:39 PM   #5
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Re: Merk?

Quote:
Merck has to be a buy - all the local personal injury lawyers are running TV ads looking for people who took Vioxx.

Blood in the street and all that *stuff - heh, heh, heh.
Could be. I can't say I have any special talents evaluating drug companies, though. A safer but still juicy play might be a drug/healthcare ETF.
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Re: Merk?
Old 01-28-2005, 08:15 PM   #6
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Re: Merk?

I remember when Pfizer had big time problems
with some heart thingamagig. They recovered
nicely after many had written them off.

Cheers,

Charlie
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Re: Merk?
Old 01-28-2005, 08:18 PM   #7
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Re: Merk?

I bought MRK using the same logic right after the first big drop. * The knife continues to fall....
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Re: Merk?
Old 01-28-2005, 08:50 PM   #8
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Re: Merk?

Lets see, my trip to Vegas at a nicer hotel, or stay at the Hotel Six and invest the difference in MERK. HMM, Better take some MERK drugs before this makes sense.
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Re: Merk?
Old 01-29-2005, 09:33 AM   #9
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Re: Merk?

Sorry about misspelling "Merck" on the
original posting on this thread. ....... Never
claimed to be perfect.

Cheers,

Charlie
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Re: Merk?
Old 01-29-2005, 10:15 AM   #10
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Re: Merk?

I like Pfizer better. They're less problem riddled and we should see some small earnings growth in the near future, hopefully picking up to the high single digits 2 or 3 years out. You get over a 3% dividend yield, and that dividend has been raised every year for 38 i believe. Pfizer has a lower payout ratio as well. I think going forward both companies have a bright future once the current problems blow over.
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Re: Merk?
Old 01-29-2005, 11:30 AM   #11
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Re: Merk?

Both Pfizer and Merck have problems in terms of the looming COX2 lawsuits. The only reason Pfizer profits jumped so much is because people switched from Vioxx to Celebrex when the news first came out.
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Re: Merk?
Old 01-29-2005, 11:35 AM   #12
 
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Re: Merk?

I like it. My best stock picks have always been good companies who's stock prices were beaten down by recent bad news.
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Re: Merk?
Old 01-29-2005, 02:41 PM   #13
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Re: Merk?

personally id rather own there bonds,but thats just me.Look at JNJ and MRK,which would you rather own?While not quite apples to apples,you get my jist.Also i think there is merit with the med ETF or med fund play as well.The beauty of indexes is generally they dont "blow up".Obviously the downside is less potential gain as well,but then whats the price for a few less forehead wrinkles?--ak
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Re: Merk?
Old 01-30-2005, 10:28 AM   #14
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Re: Merk?

I own Johnson and Johnson AND Pfizer. Both are great companies with a bright future. JNJ looks better at the moment, but about the same time last year JNJ looked like its growth was slowing and PFE looked better. The market consensus goes back and forth. Own good companies and you will win either way.
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Re: Merk?
Old 02-01-2005, 04:25 AM   #15
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Re: Merk?

MRK current yield = 5.4%
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Re: Merk?
Old 02-01-2005, 06:26 AM   #16
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Re: Merk?

I'm an ardent defender of capitalism, but I've lost respect for Big Pharma. Reasons:
1) Their self serving torturing of data...see VIOXX.
2) Synthetic drugs by definition only work because they block certain biochemical processes within the body and almost always result in wicked side effects...e.g. VIOXX, Statins (liver failure), and HIV/HAART drugs (liver disease & heart problems) & "anti depressants" that can lead to increased suicide risk.
3) The way too cozy relationship between big pharma and the FDA & the physician community.

They are a trial lawyer's dream. I heard a value manager say that Merck buying Merck in the 40's was a great proxy for money market cash...with the 3.5% yield. Glad I didn't take that advice.
Mark
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Re: Merk?
Old 02-01-2005, 07:56 AM   #17
 
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Re: Merk?

Good post on Merck, Mark

As with almost all areas of life, "buyer beware" is good advice. Being as cynical as I am has saved me countless
times. Reagan used to say, "Trust but verify!" Good
advice for all areas of living, but perhaps especially
important in matters regarding your health.

JG
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Re: Merk?
Old 02-01-2005, 08:33 AM   #18
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Re: Merk?

Perhaps im being a bit to sarcastic,but i think big pharmas/FDA probs arent over yet.Where theres smoke theres fire.MRK is not to big,nor to important to fail.IN the event of a takeover,some shareholders will breakeven/be compensated,some wont.the bond holders on the otherhand stand a better chance.1pt less payout currently (bonds vs stock)but a somewhat better insurance
Bond ID (CUSIP) Bond Type Moody S&P Description Coupon (%) Maturity Callable Price YTM (%) Link To:

589331AH0 Corp. Bond Aa3 AA- MERCK & CO INC 4.375%13SR NT DUE 02/15/13 4.375 02/15/2013 No 98.688 4.57200

It wouldnt take much for a debt ratings downgrade to make this even more attractive,personally thats what i would wait for rather than stock bounce which is skeptical at best.I dont follow fundamentals much,but I remember MRK being the least aggressive in terms of production pipeline say vs PFE.Which has realized that growth meant spending $'s on aqcuisitions.Buyer beware--ak
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Old 02-17-2005, 06:39 PM   #19
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Re: Merck

Couldn't stand it any longer assumed the position today!
Anybody got any painkillers. I sent all mine to Rush.


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Re: Merk?
Old 02-18-2005, 11:32 AM   #20
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Re: Merk?

One promblemo - We are calculating the current P/E which is all fine and dandy, about a 9 or 10. But we need to factor in the big drop in the EPS next yr as a result of the drug fiasco. MRK lost a billion dollar drug that will take its toll on the EPS next yr. I agree to buy when things are ugly but I find it hard to pick the creme of the crop. I recall what Buffet's advice was to an investor at the BRK annual meeting a few yrs back and went something like this:
"We would be interested in buying some of the pharm stocks if the price was right but we also find it difficult to pick the best one (i.e. how can you really quantify a pipeline?)....I think a buying a basket would be the best approach."
Things have changed since then but I would agree with the buy a basket approach.....ETF it or spread your money around 3-5 beaten down pharm stocks.
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