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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Sergio H who wrote (48150)	5/29/2012 4:25:07 PM
From: Bocor	3 Recommendations Read Replies (1) \| Respond to of 78701

Positives for MRK are: +obviously the dividend and the low payout ratio of around 40%. +Januvia and Janumet diabetes drugs seem to be boosting the bottom line, and diabetes is only going to be a bigger market as the population continues to gorge on Big Macs and Fries. +Revenue has increased for four consecutive quarters and they have beaten estimates for 3 quarters {for whatever game that is worth} +long-term debt to equity ratio of 0.28 +beta is 0.62 negatives: -R%D pipeline is not impressive. High expense and huge risk of failure has caused Merck {and to be fair others as well} to shift their strategy from R&D toward acquiring the rights to drugs from other companies. Some seem to feel they are overpaying. Time will tell. -LLY's Jentadueto will be in competition with Merck's Janumet; I think they are fairly similar, thus marketing will be expensive and key to revenues. -Vorapaxar last year was a bust. -Singulair is going off patent this summer, and having a child with asthma, I know how effective that is. Singulair was/is a $5 billion drug. -Zetia and Vytorian expire in 2017, so for a LTBH investor, that is a 4 billion hit, with a potential market value hit. -Its acquisitions have not seemed to make a splash in their bottom line. Neutral: They have a potential winner in Anacetrapib, but it's efficacy has yet to be proven, and Dalcetrapib by Roche was recently withdrawn as the company announced late-stage trial showed it wasn’t working. Granted Anacetrapib may be more potent, but the overall mechanism of both medications remains to be seen. Until then there is a big question mark about the future of their pipeline. I have looked at it closely as a substitute for ABT, but haven't yet been persuaded.