Hello, Investor2. Ordinarily, I'd expect powerhouse MRK to come back - they have new drugs in their pipeline, I presume, and I'd expect among these new drugs a blockbuster or two to stimulate sales and investor interest in the stock, as has happened in past.
But with the withdrawing Vioxx, nobody's got any confidence that the low's been seen in the stock price until there's an assessment of the number of lawsuits and the damage to claimants can be guessed.
It's hard for me to understand comparable situations because all the major pharma's have been beaten down for so long. The three other companies that have had legal or off-patent woes that I follow that've really seemed to have been signifcant are SGP, WYE, and BMY. These companies have all survived, but their stocks have never recovered. To me, the stocks have been mired in a tight trading range. Years have past - it feels like - and there's no great resolution to their problems. So I assume similar for MRK: there'll be a trading range established - maybe 20-30, maybe 25-35 - I don't know, and MRK will be mired in it for years.
This is not a situation in which I want to be in now. I've closed out my WYE position recently, I cut back my BMY last year, and I've taken a few lumps in MRK now by selling about 1/4 of my small position.
For you who is a bottom feeder and with the patience to hold for possibly a decade or more - you might want to stab a little MRK now. Somebody is betting on the company - there are buys everyday after all. OTOH, I don't know how many more decades you've got left for holding on to a position, and there seem other downtrodden A list stocks that offer better prospects of recovery and sooner too. I offer CL as an example. (JMO and I could be wrong.)
Let us know what you finally decide to do! |
