Bummed about my Pfizer investment....

Pfizer (PFE) released earnings this morning and it is getting pounded today in market trading. As I write this the last trade price at Yahoo!Finance I saw for Pfizer (PFE) was $22.11. I this Pfizer is a great company, I think it has a great management team, I also think long term pharmaceutical companies are a great investment with the baby boomers getting older. However, I have been adding to my position from ~$42/share back in 2001. I have been riding this stock down the past 4 years and I am still taking a beating.

Besides IBM, PFE is the largest stock investment I have. My average share price for PFE is now around ~$31/share. Just when I think the latest fall in the stock price is a good buying opportunity the stock continues to go lower.

Its depressing to realize I have a significant loss in this stock investment. I have been buying PFE as a long term investment, I always said its ok if it takes 10 years, but I believe PFE will continue to grow and become more profitable. However, stock declines are tough for me - its easier to swallow if a stock price stays flat because at least I can say I haven't lost any money ;-).

With that said, I am going to continue to add to my PFE investment. PFE may be a drag on my investment returns for the next couple years, but I continue to believe it will pay off in the long run.

Update: I also saw that the forward P/E ratio for Pfizer (PFE) as reported on Yahoo!Finance is now ~10.27! Wow - that seems so low to me for such a great company. But what do I know?

Related in Stocks:

Chairmen Letters to Shareholders (Mar 09, 2014) Its that time of year again --the close of fiscal years means an overload of annual reports including Letters to Shareholders. Two annual letters that I read each year are those from Berkshire Hathaway (Warren Buffet) and Fairfax Financial (Prem...

Investment Performance January 2014 (-2.94%) (Feb 23, 2014) January 2014 Investment Report: January Highlights: January was a bad way to start out the year, but our portfolio performed slightly better thank our benchmark (-2.94% vs -3.17%). We made our regular monthly investments in our Roth IRAs, and some...

Investment Performance December 2013 (+2.20%) (Jan 10, 2014) December 2013 Investment Report: December Highlights: December was another subpar for us as our portfolio performed poorly compared to our benchmark (+2.20% vs +2.58%). We made our regular monthly investments in our Roth IRAs, and some dividends & dividend reinvestments....

Comments (3)

DATE: 9:13 PM
I bought simon property group (SPG) at 50 and sold it when it dropped to 45. It is now at $70! I bought Wipro (WIT) at 6 and sold at 5 and now it's at 9! Don't worry about it.

DATE: 1:37 PM
I had to get out of Pfizer after all the potential lawsuits and the challenges with Merck. I'm glad I did at less of a loss but I sleep better at night.On a side note, I don't know if I'm doing much better w/ the alternative stock but it just helps me sleep at night.

I do feel PFE is good stock to buy and hold for long term. It has low P/E and a holds a potential of significant returns for long term buyers. Lipitor loses its patent four years from now and part of the reason pfizer is taking such a pounding is the loss of its best selling drug Lipitor and the recent news about Torcetrabin (I hope i spelled it right).
Pfizer does have significant number of drugs in its future pipeline which could end up being blockbuster drugs.

If you take Merck, the stock is back to its pre vioxx price. Also in last few years it has launched number of drugs e.g. Gradasil which have potential of being blockbuster drugs. Also it has done well in fighting the legal battles over vioxx issues. In the past two years it has only paid few million dollars.

Same goes for Bristol Myer Squibbs (BMY). The stock has taken a beating in last few years because of numerous reasons and plavix and its last CEO being one of the big ones. Bristol would most likely win the legal battle in 2007 and also has a good pipeline for future drugs.

Day to day prices are driven by speculators and for a long term buyer these should be ignored and be looked as opportunities to buy.

Pfizer recently increased its dividend to $1.16 which puts it at a yield of more than 4%. Pfizer has been cutting down on its costs for past few years which would help bump up the net profits.
Pfizer has significant cash reserves (about 12 Billion) and sale of its business unit to Johnson and Johnson would result in an additional sum of equivalent cash which could be used to make acquisitions.

Short term pfizer may go through some turbulent times but long term it holds great potential.

Post a comment

(Comment moderation enabled.)

About 2millionblog.com

A personal finance weblog of my journey to reach my goal of $2 million + the value of my primary residence.
Current Net Worth: $1,938,393


New Personal Finance Articles

PF Blogs