Tuesday, December 13, 2011

Pfizer after Litptor


One of the companies that is highly followed by both the individual and professional investor is Pfizer (PFE). In the near future PFEs bread winner Lipator comes off patent and will become a generic drug.  Many experts feel there are enough drugs in late stage trial to make up for that lost income stream but I don't see that in the revenue and earning projections. Since early August the stock had good upward price momentum as evidenced in this graph provided by Barchart:

Barchart technical indicators:

  • 88% Barchart technical buy signal
  • Trend Spotter buy signal
  • Above its 20, 50 and 100 day moving averages
  • 16 new highs and up 11.18% in the last quarter and is just 1.50% off its 1 year high
  • Relative Strength Index 58.25%
  • Barchart computes a technical support level at 20.04
  • Recently traded at 20.31 with a 50 day moving average of 19.31

Summary:  I'd buy Pfizer (PFE) for 2 reasons.  the first is that the stock is selling at about half its trailing P/E ratio.  The second is that most analysts think that the company will be able to find replacements for Lipator coming off patent.  If you are going to jump on board now is the time.  Since late September the stock has been pushing up the upper limits of the high channel on the 14 day turtle chart so I wouldn't look for a new dip.  Get on board before the train leaves the station.

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