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Strategies & Market Trends : Value Investing

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To: Sergio H who wrote (48639)	7/9/2012 1:15:59 PM
From: E_K_S	Read Replies (1) of 78748

Abbott Laboratories (NYSE: ABT) Merck & Co. Inc. (NYSE: MRK) Pfizer Inc. (NYSE: PFE) goo.gl Hi Sergio - Trying to figure out you over valuation thesis for ABT and MRK. I own both and peeled off a few shares of MRK in 2/2/1012 at $38.55 thinking it was at the high end of it's value range. Both ABT & MRK continue to run higher (more than 10% from my last sale). It appears that the market likes the drug companies again especially after the Supreme Court ruling on health care. I am not sure what it all means other than the value metrics we are looking at are not the ones Mr. market is viewing. I am not buying at these levels but I will continue to hold. Can you be a little more specific as to why ABT and/or MRK are considered over valued in your opinion. Here was my reason why I though MRK was fairly valued at $38.55/share on 2/2012 ( goo.gl ). I based my opinion on the GN value. Maybe I need to recalculate using the EKS$ (which is based on future earnings). Perhaps an additional value should be added for being a beneficiary of the Obama care legislation. For now, it is probably too late to find new values in this sector except for one or more of the medical equipment stocks like BDX and/or MDT. EKS

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