If you recall my previous post, i estimate we are somewhere between a late stock market bull and peak of economic cycle. The chart recommends moving into consumer non-cyclicals and healthcare stocks. I am certainly more positive about consumer non-cyclicals such as Coca Cola, Pepsico, Krafts, Mondelez, Kelloggs. But what about healthcare stocks?
Last year, we saw pharmaceutical companies facing problems keeping hold of their patented drugs, some like Pfizer winning court cases to extend their licence to produce their blockbuster drug, Lipitor. But even if they lost the case, we as investors still could benefit from investing in generic drug manufacturers.
2013 looks like its going to be a bad year for large Pharma such as Eli Lilly. (LLY). Their full year revenues declined to $22.6 billion from $24.3 billion in 2011, total pharmaceutical sales were also down by 9% YOY. I believe their 2013 earning will continue to be lower than expected as their top grossing products loses patency. Having said that, they only give out a moderate dividend yield of $1.97/yr. I do think they are overvalued currently and i cant see their prices going beyong $60. Currently Eli Lilly is trading @ $54.66 and bouncing off top resistance level @$55.
I think its the same old story for Johnson & Johnson (JNJ). I had previous bought it @ below $65/share back in 2011 and held it till roughly end of 2012. I valued JNJ @ around $75, which it has actually exceeded. It has hit a huge resistance at $79.20 and many investors are getting out of it while its still overvalued. Actually JNJ is a great stock, their dividend payout is quite good (@ 3.2% annually). Like many investors, i think it was a good time to take profit and run.
I have given examples of 2 best Pharma companies in my opinion and both of them are not showing good opportunities. Sometimes one cannot follow the market cycle blindly too, do your own due dilligence before investing in any stock.
You might find a great healthcare stock that is undervalued, study it properly before investing. It seems to me, most healthcare stocks are overvalued right now.
Last year, we saw pharmaceutical companies facing problems keeping hold of their patented drugs, some like Pfizer winning court cases to extend their licence to produce their blockbuster drug, Lipitor. But even if they lost the case, we as investors still could benefit from investing in generic drug manufacturers.
2013 looks like its going to be a bad year for large Pharma such as Eli Lilly. (LLY). Their full year revenues declined to $22.6 billion from $24.3 billion in 2011, total pharmaceutical sales were also down by 9% YOY. I believe their 2013 earning will continue to be lower than expected as their top grossing products loses patency. Having said that, they only give out a moderate dividend yield of $1.97/yr. I do think they are overvalued currently and i cant see their prices going beyong $60. Currently Eli Lilly is trading @ $54.66 and bouncing off top resistance level @$55.
I think its the same old story for Johnson & Johnson (JNJ). I had previous bought it @ below $65/share back in 2011 and held it till roughly end of 2012. I valued JNJ @ around $75, which it has actually exceeded. It has hit a huge resistance at $79.20 and many investors are getting out of it while its still overvalued. Actually JNJ is a great stock, their dividend payout is quite good (@ 3.2% annually). Like many investors, i think it was a good time to take profit and run.
I have given examples of 2 best Pharma companies in my opinion and both of them are not showing good opportunities. Sometimes one cannot follow the market cycle blindly too, do your own due dilligence before investing in any stock.
You might find a great healthcare stock that is undervalued, study it properly before investing. It seems to me, most healthcare stocks are overvalued right now.
Hurrah, that’s what I was trying to get for, just what a stuff Presented at this blog!! Thanks admin of the site. Healthcare market trends
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