Thanks to @intercst for pointing out the efforts of Big Pharma to roll back the limits on drug prices, focusing its requests for president-elect Donald Trump and Congress on “fixing” a Biden-era law allowing the Medicare health plan to negotiate prices for its costliest medicines along with insurance changes.
@intercst mentioned that he bought LLY, MRK and PFE. I think this is a good idea but decided to investigate the companies using the BMW method (remember good ol’ BMW-Jim?). In addition to the usual factors.
LLY is on the list of potentially overpriced stocks. MRK and PFE are below their 25 year average.
AVE CUR RETURN 6-MO
TICKER CAGR CAGR FACTOR RMS PRICE CHG
LLY 9.6% 16.6% 0.21 2.60 839.96 1% Eli Lilly and Company
Fidelity: Equity Summary Score = 7.9.
P/E ratio 70.78
Dividend < 1%
Analyst Rating 7.9 (Bullish)
BMW Method Screen Results for PFE
AVE CUR RETURN 6-MO
TICKER CAGR CAGR FACTOR RMS PRICE CHG
PFE 5.8% 3.8% 1.61 -1.53 22.14 -19% Pfizer, Inc.
Equity Summary Score 7.2
P/E ratio 15.91
Estimated dividend rate/yield 7.7%
Analyst rating 7.2 (Bullish)
BMW Method Screen Results for MRK
AVE CUR RETURN 6-MO
TICKER CAGR CAGR FACTOR RMS PRICE CHG
MRK 8.2% 7.5% 1.17 -0.52 78.00 -22% Merck & Company, Inc.
Fidelity Equity summary score 9.4
P/E ratio 11.69 (that’s half what it used to be)
Estimated dividend rate/yield 4.1%
Analyst rating 9.4 (Very bullish)
Based on these factors I bought MRK and PFE but skipped LLY since the market has already priced in the growth expectations.
Wendy