Merck & Company, Inc. (MRK) - This One is a Easy Call ! ! !
Here again is one of the Dow 30 component Companies that is what I call "A Easy Call." It is very similar to Johnson & Johnson and 3M with a solid Valuation and Technically it is extremely over-bought.
After you have years of experience in Forecasting it boils down to "Easy Calls" and Tough Calls." I have learned that unless it is an "Easy Call" with near Excellent Fundamentals and Technicals - I just move on until I find one that is. When you have a large universe of nearly all the quality and conservative Companies, it is remarkable to most Investors when I say: There are always Excellent Companies that are "Easy Calls" at or around a Bullish or Bearish Inflection Point.
The reason (MRK) is a "Easy Call" and that it is unique for the current Dow component Companies is that -- it is currently selling at a peak of $48 and therefore is in a strong ascending trend since mid 2011. Just how much higher can it go? Not Much!
I am looking for a "Probability for Profit" of at least 20% or more when I Recommend a security to my Clients. My Fundamentals for (MRK) are not all that good to support much further appreciation of the stock price.
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Merck & Company, Inc. -- (MRK)
Fundamentals: (Old-Fashioned Valuations Must be - in Place before Taking Positions). The projected Earnings Growth of (MRK) is UP and the negative seems to be in the past for the foreseeable future. The strong price appreciation for the past 14 months has perhaps used up the Earnings positives and does not support further strong price appreciation. The current Price of (MRK) has more recently clearly kept up with many other Dow 30 Companies that are currently and remains lofty.
Technicals: The Indicators are all pointing to being FLAT to DOWN. Buying is definitely not prudent at this price.
I can help you with this if you ask.
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Opinion: HOLD, if you own Merck & Company, Inc. - be prepared to take Profits in the coming weeks.
Forecast: There is nothing to suggest that it Coming Down in the Short (one - three months) to Intermediate (three - nine months)-Term. HOLD for now? And seek Guidance from a professional. Most "professionals" will advise holding or even buying. Do they EVER recommend selling or offer a Bearish "Warning" such as the above?
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Want more detail? Send me an Email.
Dr. Steve