Zeev's Turnips Patch-No Politics (ZEEV)

[Zeev Hed]

No it is more a pattern I expect because of relative undervaluation compared to the S&P. Late in cyclical bulls, big pharma often come back into favor, because of a more predictable growth. MRK for instance is generating oodles of cash, has a yield of 3.5 % and a PE (under 15) at the bottom of its historical range (15 to 45). It is simply a value stock for which you are paid 3.5% to hold until the street gets back into it. And yes, I know about patents expiring and empty pipe line etc. But this company is a jugernaut, once it wakes up and the $3 B per year they spend on R&D starts and show up in new products, it could run to a new all time high or more than double the current price. It may take some waiting and trading in the general $40 to $47 range, then the $47 to $55 range, but I am patient....