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When Merck (NYSE:MRK) was the most hated stock on Wall Street post-Vioxx, one analyst taking the other side of the trade was Mike Krensavage of Raymond James. At the time his point was simple: Merck's cash flow yield relative to its enterprise value of 11%, its highest since 1994, was the highest in an industry where the typical yield was 4.4%. "If you have good enough cash flow, even with declining sales, you can make money on your investment," he said at the time.

Enter Pfizer (NYSE:PFE), which he has ranked as "market perform": It currently has an 8% cash flow yield, but Krensavage told his sales force: "We continue to liken Pfizer to a convertible bond." Even if sales grow sluggish, which he believes is likely, it can continue to cut costs to generate enough free-cash flow to produce a healthy yield. He goes so far as to say he would reconsider his rating if the cash flow yield hits 10%.

Meanwhile, the sleeper in this whole Torcetrapib fiasco might be Abbott (NYSE:ABT), which is buying Kos Pharmaceuticals (KOSP). Kos makes Niaspan, a slow-release form of the vitiamin Niacin, which has long been used to raise good cholesterol.

Source: Pfizer Post-Torcetrapib: Follow The Cash -- And Abbott