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In this new series of articles, I will examine recent bullish and bearish calls made by Jim Cramer on CNBC's Mad Money TV program. I will present three bullish calls made by Cramer on February 9, 2012 in the healthcare sector.

  1. Pfizer (NYSE:PFE)

Cramer recommends holding on to Pfizer, citing the recent massive buyback announced by the company. He also believes that the 4.16% yield would offer support to the stock. He does acknowledge that Pfizer is not his favorite play in the sector.

The share repurchase program Cramer refers to was announced by the company in December 2011. Pfizer plans on repurchasing between $7 billion and $9 billion this year. Based on the current market capitalization of $162 billion, the number of shares outstanding will fall by approximately 5%. The buyback is a means for the company to stay in the good books of the investors. Pfizer's Lipitor cholesterol franchise, which accounted for 14% of total 2011 sales, lost its U.S. marketing exclusivity in November 2011. Lipitor sales fell by 50% in the very first week of the company losing patent protection. The company is trying to develop other opportunities in stroke prevention and treatment for rheumatoid arthritis, among other drugs.

I largely agree with Cramer on Pfizer. My 12-month price target of $25 a share is obtained by applying a multiple of 11 to my 2012 calendar year EPS estimate of $2.27 a share. A return of 22% (including dividends) is possible from current levels.

  1. Bristol-Myers Squibb (NYSE:BMY)

While discussing Pfizer, Cramer reminds viewers to not forget Bristol-Myers. He says that he likes the fact that the stock has declined in the last few days. In fact, he likes it "even more" now. The stock is down 9% year to date compared to the 7.5% increase in the S&P 500 index and 5% increase in the biotechnology and drugs index.

Bristol-Myers has a very similar story to that of Pfizer, in my opinion. It will be losing U.S. patent protection for its Plavix drug in May, 2012. Plavix was responsible for $6.8 billion in U.S. sales and a decline of 50% in Plavix sales is anticipated by S&P Equity Research. Other key drugs facing patent expiration in the U.S. and Europe over the next four years include Avapro, Abilify and Sustiva. Like Pfizer, Bristol-Myers has been investing in expanding its product portfolio and has in fact teamed with Pfizer to develop a blood thinning agent for stroke prevention. Analysts expect the firm's earnings to stay flat over the next 5 years, compared to the 11% annual growth in earnings of the industry.

I do not agree with Cramer on Bristol-Myers and believe that Bristol-Myers shares are fairly valued at current levels. In fact, I project a 4% decline from Friday's closing price of $31.99. My price target of $31 is obtained by applying a multiple of 15.6 to 2012 EPS estimate of $1.97.

3) Covidien (NYSE:COV)

Covidien develops, manufactures, and sells medical devices and supplies, diagnostic imaging agents, pharmaceuticals and other healthcare products. The stock is up 15% year to date and is flat over the last 5 trading days. Cramer thinks that the stock is attractive at these levels and is a buy candidate.

Analysts expect the firm to grow its earnings at an annual rate of 10% compared to the historical growth rate of 14% and the long term industry growth rate of 16%. Applying a multiple of 14 to 2012 EPS estimates of 4.36, my 12-month price target of $61 is obtained. A total return of 19% (including dividends) is possible from current levels. I concur with Cramer on Covidien's attractiveness.

As always, please do not consider this list as a "buy" list, rather use this list as a starting point for your research. Of the companies listed above, Pfizer might be the better bet to ride out any potential correction in the stock markets from these inflated levels.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Cramer's Healthcare Picks: 2 To Buy, 1 To Avoid