Dueling Fools
June 24, 1998
Pfizer Pfool Pfight
Viagra! Good, got that out of the way first. Beyond the impotency pill craze sweeping the nation, some investors forget that Pfizer <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PFE)") else Response.Write("(NYSE: PFE)") end if %> is one of the largest pharmaceutical companies in the nation -- long before that little blue pill of revival. BenGay, Visine -- it's all Pfizer.
This week Paul Larson (TMF Parlay) and Louis Corrigan (TMF Seymor) are Dueling Fools. In our first medical stock Duel ever, Paul is pfond of Pfizer while Louis thinks the recent run-up is looking for a pfall.
So let's get to it! The pharmaceutical fracas is about to begin.
You Get to Vote!
After reading all of the arguments, cast your vote for the winner of the Duel. We'll tabulate results each week and revisit them from time to time to see whether you were right! As always, we invite you to join us in the Dueling Fools Message board to continue the duel.
[Any suggestions, comments, praise, or flames, please send them along to the Dueling Fools Team.]
| The
Bull... Let me start my bullish case by saying that, by any sort of earnings or cash flow valuation, Pfizer is going to look quite expensive. At over 60x trailing earnings, the company's stock can hardly be called cheap. Nevertheless, there are some downright valid reasons the market has bid the stock to such stratospheric heights. The price tag may be high, but we are talking about a top-shelf company that has a very bright future. Continue... |
The
Bear... A year ago, Pfizer traded at around $50 a share. Since then, it has delivered $1.76 per share in earnings, beating analyst estimates over this period by all of one penny. Nonetheless, the stock price has more than doubled. A contingent of some 30 or so analysts now expect the drug maker to deliver $2.08 EPS this year and $2.55 in FY99. Even using the high-side estimates of $2.35 per share for FY98 and $2.90 for FY99, the stock trades at about 46 times this year's earnings and 37 times earnings 18 months out. Continue... |
Results for last week's Socially Responsible Investing Duel
| Answer | Percentage |
| I can't make up my mind | 4% |
| TMF Edible's Bull argument | 43% |
| TMF Selena's Bear argument | 25% |
| They were both excellent | 16% |
| They were both lame | 12% |