Sonki,
I looked around Novartis web site and read through the posts on this thread. I don't think its possible to say a whole lot at this point as the effect of the merger will be some time in comming.
1. I would say that the situation with Drug stocks is more like automobiles than high tech with which you are more familiar. Trying to use a MSFT or INTEL approach and apply it to drug stocks will not work. There are many good players be it MRK, PFE, Bristol Myers Squibb, Johnson and Johnson and so forth. And all of them have and can do well. This industry is more win win than win loose.
2. Analysts are often caught in a static frame of reference much like PC magazine editors. Unfortunately, readers may take the words too literally. From your own experience in high tech you know that competing companies put out new releases of software. Maybe six months apart or one year or some other timeframe. The magazines say this is the latest and greatest from company x. A few months later after company y puts out its new release then just the opposite is said. Having said that, I would not be overly worried that MRK has drugs going off patent over the next few years. They will have new drugs.
3. MRK trades at a high PE because it is one of the most respected companies in America. It has a way of delivering earnings and dividends year in and year out. It is considered one of the best managed companies in the world.
4. Bottom line, if you pick from among the top tier Drug companies you will not be far wrong. It would appear that Novaris will be in this league. Other than for personal preference which is hard to quantify I think it is possible to drive oneself crazy trying to figure out which drug company is the best, numero uno, be all end all
company. So take your time, do your research and select the one or two that feel right for you and your portfolio.
Good Luck to you and the rest of the novarties,
I'll be watching and seeing how it goes.
Brian |
