Sunday, September 28, 2008
People tend to cut back during a recessionary time. No extravagant vacations, new jewelry, golf clubs, wardrobe updates, or new shoes for your tricked out ride. Most industries will begin to slow as consumers tighten their wallets. But a few industries will continue to see profits rise because consumers need these products to survive. Pharmaceuticals have been one of the few industries to hold strong during this slow down in the economy. Here are a few pharmaceuticals that everyone should consider adding.
Pfizer (PFE) - Pfizer, Inc. engages in the discovery, development, manufacture, and marketing of prescription medicines for humans and animals worldwide. Lipitor, Viagra, Lyrica, Zoloft, and Celebrex are a few of their better known products. The stock is near a 52 week low, so this could be a great entry point. PFE is sitting on a lot of cash (26.1B), so look for them to be buying up smaller competitors in the near future.
Eli Lilly & Co. (LLY) - About half the size of Pfizer, but just as profitable. Federal health regulators delayed a decision on a blood thinner from Eli Lilly for a second time Friday, raising concerns on Wall Street about the potential blockbuster medication. The drug, called prasugrel, is considered crucial to Indianapolis-based Lilly, which faces a wave of patent expirations in the next few years. If passed, LLY will see a considerable jump in the stock price, but it is a gamble at this point.
Johnson & Johnson (JNJ) - Seen as a more stable competitor due to a more diverse operating base. Pharmaceuticals account for about 41% of total sales, with medical/diagnostic products at 35% and consumer personal care products at 24%. The stock has acted better than most, but it has made little net progress in the last six years.