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T = Technicals on the Stock Chart are Strong
As of November 21, Pfizer has underperformed the S&P 500 over the past month. Pfizer has dropped 4.90% while the S&P 500 has dropped 2.94%. That said, Pfizer has outperformed the S&P 500 on a consistent basis over the long haul.
Year-to-date, Pfizer is up 16.58% while the S&P 500 is up 12.57%. Over the past calendar year, Pfizer is up 33.06% while the S&P 500 is up 16.77%. When you look at three-year returns, Pfizer is up 49.22% while the S&P 500 is up 35.44%.
Pfizer is currently trading a few cents below its 50-day SMA of 24.76. It’s trading a few cents above its 100-day SMA of 24.19. However, what stands out most is that it’s trading moderately higher than its 200-day moving average of 23.13.
Pfizer has been a great stock to own over the past few years, and it’s likely to continue to be a great stock to own in the near future. It will suffer setbacks if the Fiscal Cliff situation doesn’t turn out well, but it will weather the storm better than most stocks.
E = Earnings are Steady Year Over Year
Pfizer is steady with its earnings, which related to the steady performance of the stock price. Investors don’t look at Pfizer as a get-rich-quick opportunity. Rather, it’s a way to help steadily build a solid portfolio. As you can see from the chart below, it’s highly unlikely to see any significant surprises.
|Revenue ($) in billions||48.24||48.30||49.27||67.06||67.42|
|Diluted EPS ($)||1.17||1.20||1.23||1.02||1.27|
(Fiscal year is January-December.)
Pfizer earnings are rarely a surprise on a quarterly basis as well. There will be some ups and downs, but those swings will be small in nature. Analysts are expecting a slight decrease in earnings for Q4 and then a bounce back to current levels for Q1 of 2013. Below are the numbers for the past few quarters.
|Quarter||Sept. 30, 2011||Dec. 31, 2011||Mar. 31, 2012||June 30, 2012||Sept. 30, 2012|
|Revenue ($) in billions||16.61||17.83||15.40||15.06||13.98|
|Diluted EPS ($)||0.48||0.18||0.24||0.43||0.43|
T = Trends Support the Industry in which the Company Operates
With the FDA becoming a little more lenient due to outside pressure over the past few years, more drugs have been hitting the pipeline. Many of these drugs are potentially life-saving and/or improve the quality of life. This is a win-win situation for the FDA, pharmaceutical companies and patients. While the FDA still holds safety as their number one priority, it seems as though they’re beginning to realize that it’s better to give patients a chance.
This sector has done well over the past few years, and that trend is likely to continue. As mentioned earlier, a big market correction will negatively impact Pfizer’s stock price. At the same time, any company involved with pharmaceuticals also has the potential to pop at any given moment if there is a surprise approval. This can happen regardless of overall market conditions.
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