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Biotech / Medical : PFE (Pfizer) How high will it go? -- Ignore unavailable to you. Want to Upgrade?

To: American Spirit who wrote (7543)	4/28/1999 9:33:00 PM
From: B.C.	Read Replies (1) \| Respond to of 9523

American Spirit: I'm new in Pfizer too, and looking to buy more on the dips. The more that's accumulated now will make that 3:1 split all the more sweet. :) Carli

To: American Spirit who wrote (7543)	4/29/1999 12:27:00 AM
From: BigKNY3	Read Replies (1) \| Respond to of 9523

PFE versus the Dow: A Peabody Analysis The Dow reached an all-time high of 10,845 today and PFE declined. YTD, the Dow is up 18.1% and PFE is down 5.6%....Are these opposite growth trends common? How often and by by how much? What does it mean? Here are some facts and opinions by Mr. P: -PFE and the Dow are correlated by a positive .55. -During the 12 year period of 1987 to 1998, the growth trends of the Dow and PFE went in the same direction 8 times and in the opposite direction 4 times .....with the 2 most recent opposite trends resulting from the Clinton Healtcare Reform proposals (1992-1993). During this 12 year period, PFE averaged an impressive annual growth of 31.6% versus a 14.6% growth for the Dow, a positive 17.6% differential for PFE. -During the recent full-year 5 year period from 1994 to 1998, both PFE and the Dow showed positive growth with PFE growing annually 50.8% and the Dow gaining 20.1%, a positive 30.7% differential for PFE. PFE's growth beat the Dow growth every year during this period. -Based on historical growth trends, the Peabody Model predicts that the PFE price for the Dow at 10,845 should be $157.67. According with today's close of 118.00, PFE is 25.2% underpriced. PFE Dow Year Ending Dow PFE % Chg % Chg Premium . Date Index Price Prior Yr Prior Yr PFE/Dow Comments 12/31/87 1,896 5.82 -25.0% 0.0% -25.0% Bear market/market crash 12/30/88 2,169 7.25 24.7% 14.4% 10.3% 12/29/89 2,753 8.69 19.9% 26.9% -7.1% 12/31/90 2,634 10.10 16.2% -4.3% 20.5% 12/31/91 3,168 21.00 108.0% 20.3% 87.8% 2-1 split (2/91) 12/31/92 3,301 18.13 -13.7% 4.2% -17.9% Clinton elected president 12/31/93 3,754 17.25 -4.8% 13.7% -18.6% Healthcare reform pending 12/30/94 3,844 19.32 12.0% 2.4% 9.6% 12/29/95 5,117 31.50 63.1% 33.1% 30.0% 2-1 split (6/95) 12/30/96 6,448 41.50 31.7% 26.0% 5.7% 12/31/97 7,908 74.56 79.7% 22.6% 57.0% 2-1 split (6/30/97) 12/31/98 9,181 125.00 67.6% 16.1% 51.5% Viagra approved (3/27/98) 4/28/99 10,845 118.00 -5.6% 18.1% -23.7% Celebrex launched (1/19/99) Average (87-99) 31.6% 14.6% 17.0% Average (94-98) 50.8% 20.1% 30.8% Conclusion It is very uncommon that the Dow and PFE move in opposite directions. The last time this trend occurred was in 1992 to 1993 as a result of the threat of the Clinton Healthcare Reform. The current negative differential of 23.7% between PFE and the Dow is the highest since 1987. The basic PFE PFundamentals have not changed since PFE reached its high of 150.13 on April 12, 1999. The current Peak to Valley decline from 130.13 to 116.75 (-10.3%) and the prior PFE Peak to Valley decline of 22.8% are a direct reflection of sector rotation, price momentum and profit-taking. Concerns about government price controls are providing an additional rationale to move out of Big Pharma. Bottom-line: The threat of healthcare reform historically can drive the Dow and PFE in opposite directions. However, the probability that price controls and the enactment of any Medicare Rx legislation before the 2000 elections is minimal at best. Accordingly, with PFE PFundamentals as strong as ever, the current Peak to Valley represents a major opportunity to buy PFE at a discount. Any purchase in the range of 113 to 119 should be a winner for long-term PFErs. Have PFun! BigKNY3