Nothing Even Comes Close

Lee and I have a list of stocks we love to hate, and one of Lee’s picks is Pfizer (NYSE: PFE). Despite the success of their COVID-19 vaccine, Pfizer has struggled with declining earnings and lacks a robust pipeline to replace that revenue. Concerns over vaccine safety and potential litigation further add to the challenges. We both agree that Pfizer is a value trap and suggest investors look at other pharmaceutical companies like Bristol Myers.

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Transcript:

So Lee and I keep a list of stocks we love to hate.

Lee has one on his list. It’s not mine, but that doesn’t matter. Either of us can contribute.

Yours is Pfizer.

Yeah, I think Pfizer is like the worst value trap in the world because, you know, they had 18 months of just pure joy with the COVID vaccine.

And since that has fallen off and nobody, the whole pandemic vaccine follow-up, you know, all these booster follow-ups, nobody’s taken them.

Because number one, there’s a lot of scrutiny on just how safe the original vaccines were.

And number two, they’ve lost money. They’ve had declining earnings for, I think, the last five years.

And despite the good dividend, which is, you know, depending on where the stock price is today, near 6%, I don’t think, you know, they have a decent pipeline, but nothing to replace the COVID vaccine.

No, and they never sort of hit that next generation of blockbusters.

Right now, it’s the diabetes slash weight loss.

Yeah, they’re not in that game.

Right, but they never had what I would describe as the next big thing. No matter how great their R&D was, I understand they have a pipeline, but it’s a very mediocre pipeline.

Well, I mean, and when you look at their product, I mean, they had Viagra, which was great for two or three years until, you know, now you can buy the same drug that is Viagra in a generic form where it’s, you know, a dollar or 50 cents or whatever it is. So, I mean, that’s lost.

And, you know, they have statin drugs and things of that nature. But again, there’s a big competition on that.

So I think the C-suite is full of people that were kind of looking back down the road the other way going, see how great it was.

And I think they could be in. And I think it will depend on who’s in power come January. I think they could be in for litigation on the COVID vaccine. It could be devastating.

Well, I don’t know Pfizer as well as you do, but I’m willing to join you in this and give it.

I’m willing to give it a thumbs up.

Yeah, I think it’s a value trap. I mean, if you’re an investor, I mean, buy Bristol Myers. It’s a better company and pays a similar dividend.

Yeah.

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