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Strategies & Market Trends : Value Line Investment Survey

VALU 36.75

+0.7%

Jan 8 3:59 PM EST

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To: EL KABONG!!! who wrote (151)	8/19/2006 10:31:31 AM
From: SI Dave	Read Replies (1) of 219

It was me. I started the Pfizer position toward the end of 2005 and have added to it through the first half of this year. It's a long-term position and is paying a 3.5% dividend at the current price. The large Rx companies rarely fail to provide a decent return if they are bought when they have hiccups in their valuation. There is a greater risk and volatility in the less-diversified companies, like SGP or LLY, but companies like PFE and JNJ are so diversified it is hard to imagine getting getting hurt in those over the long term. Pfizer is selling their very profitable consumer products division and is using the proceeds to buy back stock this year and next; the next effect is expected to be non-dilutive in '07 and accretive in '08. Plus they'll keep pumping a good piece of their cash flow into R&D. They need a strong pipeline to support and grow a $200bb market cap.

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