Drug Stks Seen As Safe Havens Even As Shrs Get Hammered>WLA
By Melanie Trottman
08/31/98
Dow Jones News Service
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NEW YORK (Dow Jones)--Large-cap drug stocks - touted as investment havens in a volatile market - are getting hammered Monday. But industry observers aren't shaken.
"I would be loath to panic and sell the drug stocks," said Brown Brothers Harriman & Co. analyst Michael Krensavage. "I still think that they're going to outperform the market."
Not so far today.
The Dow Jones pharmaceutical index has traded off as much as 5.2% Monday and was recently trading down 4.5%, led by Warner-Lambert Co. (WLA), which is off 7.4%, or 5 1/2 points, at 69. Shares of the company traded as low as 67 1/4 in Monday's trading session, off 9.7%.
Schering-Plough Corp. (SGP) has also suffered a big loss, dropping as much as 8.2% Monday. The shares have since pulled back, trading down 4 3/4, or 5%, at 90 1/4.
Even as the sector - which held up well last week - undergoes increased pressure, industry observers maintain the fundamentals of the companies remain strong.
"Drug stocks are still definitely defensive," said Steve Paspal, an analyst with John Hancock Funds subsidiary Sovereign Asset Management.
Market watchers say that's because of their consistency of earnings growth, built-in market demand, high margins and limited overseas exposure
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