Probably. I think Pfizer's decline Monday, on top of the decline from the week before, is a little too much, in the same way that when Merck fell all the way to the $25 strike, it turned out to be an interesting trading opportunity.
But that's all it is. We have to wean ourselves from this sector because in the end, the earnings power just isn't there. Monday, talking with my associate Will Gabrielski of Stocks Under $10 fame -- we share a nook in TheStreet.com's offices -- we kicked around the notion of a Pfizer without the COX-2 class. It could make $1 and change, maybe as much as $1.40. That's not a total and unmitigated disaster.
However, what would you pay for even $1.50 -- not all Celebrex sales lost? Would you really pay 20 times earnings for that? How about 15? I think that somewhere between 15 and 20 lies the answer. No more than that, though.
That is why I think Pfizer's stock could have overreacted and can go back to $28.
Then, though, I ask you, so what? Why is that so great? And who would ever pay $30 for that?
Nobody I know of.
So, in the end, the point's moot. You can buy Pfizer for a trade, but not for an investment.
Random musings: Of all the companies I have interviewed of late, my favorite -- get this -- is Sempra (SRE - commentary - Cramer's Take). I think the company, with a decent regulatory environment, can make a fortune. And it finally has that regulatory environment.
P.S. Will you be there when Cramer makes his next move?
Strong brands and companies with vast market exposure can help bolster your portfolio. Jim was able to lock in a 64% gain by buying Ingersoll-Rand at $13 and selling at $22.50. Action Alerts PLUS members were the first to see these moves. Were you among them? Get Free Access Today!
James J. Cramer Can't Hold High-Growth Stocks Down 12/20/2004 11:24 AM EST The federation of names known as GERQY is breaking free of gravity thanks to markups -- and a lack of negatives.
James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to jjcletters@thestreet.com. Listen to Cramer's RealMoney Radio show on your computer; just click here. Click here to buy Cramer's latest book, "You Got Screwed!" Click here to order Cramer's autobiography, "Confessions of a Street Addict."
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