Thursday, April 19, 2007

Sector of Choice: Pharma

It is time to look into the future and find a sector that will continue to outperform the market. That sector is pharmaceuticals. Improvements in medications have paved the way for the average life expectancy to reach new heights. With the baby boomer generation nearing retirement, the demand for meds will increase dramatically. This fact, combined with the increasing life expectancy, should make for increased profits and a sharp rise in stock price. Additionally, the two companies I have been looking at (GlaxoSmithKline and Merck) have over 20 new products in phase three testing with countless more testing in phase one and two. Predicting a 15 - 20 percent approval rate, each company will release three to four new drugs onto the market. Each company also does extensive research in cancer treatments and Merck is the company developing the new cervical cancer vaccine for women and available soon will be the vaccine for men preventing the contraction of the disease by women. I predict this vaccine will be used much like the Hepatitis vaccine in middle school creating a huge revenue for the company. Both companies have experienced a run up over the last six months so I would wait for a dip in the price before buying in. Both will be big winners in the long run. Hope this information treats you well.

1 comment:

rmacguidwin said...

Give me a price and i'll dip in...