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Thoughts on Pfieth

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January 26, 2009 – Comments (2) | RELATED TICKERS: PFE , WYE.DL

The Fairholme Fund, one of my largest holdings, made Pfizer their largest single holding recently based on expectations that it would deploy its cash hoard in acquisitions. Well, Pfizer just entered a deal to buy Wyeth. Pfizer essentially bought a pipeline - Wyeth derives about a third of its revenue from biologics, which is probably going to be a hot growth area.

Others will wonder if there's another  company they might have bought that will garner them better synergies. I think I'll trust Pfizer's judgment on this score. I'm more worried about  whether they can execute a merger of this size - it's a big one.

Morningstar gives their take here: http://link.brightcove.com/services/link/bcpid1184614598/bctid8886065001

2 Comments – Post Your Own

#1) On January 26, 2009 at 8:01 PM, DemonDoug (80.18) wrote:

 I think I'll trust Pfizer's judgment on this score.

What exactly has Pfizer done in the past 10 years to earn that trust?  Would it be cutting the dividend, going from the mid-30s to the mid-teens, sticking with a stodgy r&d that is hardly producing anything of value?

Sounds trustworthy to me :P.

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#2) On January 26, 2009 at 9:02 PM, DarkToast (47.54) wrote:

"What exactly has Pfizer done in the past 10 years to earn that trust?"

Hardon pills!

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