Derek Syphrett

A Contrarian Look at Pfizer

PFIZER IS NOT A GREAT BUY. DON'T BUY DRUG STOCKS FOR DIVIDEND YIELDS... THAT'S A MIS-MATCH OF INVESTMENT STYLES.

Drug Stocks trade on drug pipelines. Buying them for dividends is asking for trouble.

While I tend to agree that the best time to buy a pharma stock is when the cubbard is empty. I wouldn't chase after Pfizer for three reasons.

1. Pfizer has shown a distinct inability to discover novel drugs or even acquire well over the past 10 years.

2.It's such a large cap that Pfizer will many new drugs to move the needle at this point and drug development is only getting harder... there are many great drugs coming off patent and the next blockbuster need to be substantially better to out-earn them.

3. In an election year where national healthcare is a campaign issue you could be asking for more trouble than you can know.

To summarize my point I'd say:

There are easier ways to make a lot more money a lot sooner than buying a under-managed pharmaceutical company facing monumental secular and competitive challenges

I used to work at Pfizer and I thoroughly enjoyed my time there but that doesn't change the fact that Pfizer hasn't developed a blockbuster drug "on purpose" in about 10 years... remember Viagra was a lucky mistake that failed it's first indication.