Is Merck’s Stock a Buy Now?

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With shares of Merck (NYSE:MRK) trading around $58, is MRK an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Merck is a global healthcare company that delivers health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products, which it markets directly and through its joint ventures. The company consists of four operating segments: the Pharmaceutical, Animal Health, Consumer Care, and Alliances segments, and one reportable segment in the Pharmaceutical segment. Merck aims to provide valuable healthcare products and services to consumers, animals, and companies in need worldwide. Look for the company to see rising profits as it advances the products and services of the healthcare field.

Rumors surrounding the sale of Merck’s consumer health unit should soon be put to rest, according to reports from Reuters and Bloomberg. Merck is in final talks with British company Reckitt Benckiser (RBGLY.PK) regarding the unit, which currently makes name brands like Claritin allergy medicine and Coppertone sunblock. Reuters reports that the company is expected to buy the unit for about $14 billion. Other bidders in the running along with the Slough, England-based Reckitt Benckiser are Procter & Gamble (NYSE:PG) and Bayer AG (BAYRY.PK), Bloomberg reports.

Should Reckitt Benckiser, perhaps best known for making the Durex line of condoms, succeed in purchasing Merck’s consumer health business, the company would become the world’s third largest producer of consumer health products. Currently, Reckitt Benckiser ranks just ninth in the same category. Despite the fact that talks between the two companies are now in their final stages, Reckitt Benckiser says it isn’t taking any risks. “We understand that we are part of a competitive process,” the company said Monday in a statement, per Bloomberg. “There is absolutely no certainty as to the outcome or timing of this process.”

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