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TMFHelical (99.01)

Big Pharma - All In

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July 22, 2010 – Comments (3) | RELATED TICKERS: JNJ , NVS , ABT

I had four of the top 10 big pharma operations rated bullish in CAPS.  JNJ has been a long term 'core' selection and I was also bullish on  ABT, NVS, and LLY (and have owned JNJ and NVS for some time).

But pharma just keeps getting cheaper as business pressures continue to mount. US healthcare reform, comparitive effectiveness/value modeling by reimbursers/ and most recently European austerity measures.  The sector doesn't seem priced for any growth right now, and to be fair, probably won't have it either in the near term as some major patent expirations still loom.

After listening to a couple of the earlier quarterly calls from companies here, I'm now inclined to go bullish on the entire big pharma sector.  It will be rocky, but with cheap prices and generous dividends, I just can't lay off any longer.

The list is here:

http://www.contractpharma.com/articles/2010/07/2010-top-20-pharmaceutical-companies-report

And contract pharma does a great job of summarizing the position and issues each companyis dealing with (click the individual company links for summaries).

So, big 10, I'm all in (and Roche, which moved off the pharma list to the biopharma list, I'd like you too if you had an ADR).

 

TMFHelical

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3 Comments – Post Your Own

#1) On July 22, 2010 at 10:38 AM, TMFDeej (99.47) wrote:

Great post, Helical.  I couldn't agree with you more about how cheap big pharma has gotten.  I'm long a ton of them in CAPS and PFE in real life.  I'm thinking about eventually adding another to my real-world portfolio.  Which of the Big Boys is your favorite right now and why?

Thanks.

Deej 

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#2) On July 22, 2010 at 11:50 AM, TMFHelical (99.01) wrote:

Deej,

If you asked me a week ago, I would have said JNJ.  But now I think the consumer products issues are going to get worse before they get better (I should put up a separate post).  I continue to prefer the more diversified operators whose major patent expirations are behind them.  I'd be more specific, but want to stay flexible.

TMFHelical

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#3) On July 30, 2010 at 7:24 PM, MegaEurope (22.68) wrote:

Big pharma prices seem to be similar to the early 90s.  Dreman's book Contrarian Investment Strategies talked about how profitable it was buying then.

Roche does have an ADR - RHHBY.PK.  I think I will green thumb it now to go along with NVS, GSK, AZN, Grifols, H Lundbeck, Galenica and Actelion.

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