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When the Fed Responds, These Stocks Will Correct

After the Fed makes its big announcement, NLY and HTS should spike higher, and then the "sell on the news" reaction may quickly follow.

If you have a big position in either you might want to take half off the table on the day the good news of MQE breaks with the hope of buying back at least 10% lower.

Drug Stocks and Health Care

If you invested months ago in Big Pharmaceutical companies including Pfizer (PFE - Get Report) you've had a rich and rewarding ride. Look at the chart below that compares Pfizer's multi-year price to its dividend yield. PFE Dividend Yield Chart PFE Dividend Yield data by YCharts

Pfizer has had a brilliant strategy of beefing up its product pipeline while unloading whole divisions in spin-offs and public offerings.

Under CEO Ian Read, who as of Feb. 24 owns almost 879,000 shares worth nearly $20,500,000 at the Wednesday share price of $23.33, PFE has been doing some "unwinding."

The company has systematically sold off some big assets it acquired through mega-mergers, including the 2009 purchase of Wyeth Pharmaceuticals for $68 billion.

In April Pfizer agreed to sell its nutrition unit for $11.85 million to Nestle SA NESTLE (NSRGY), a company I believe is undervalued and attractively priced.

Then, in the first week of June, Pfizer announced that it's preparing to sell a minority state in its animal-health unit as part of the drug maker's plan to sell assets and sharpen its focus on human drugs.

It named the animal-health business Zoetis. PFE plans to make Zoetis a standalone company by July 2013, but first it's working on an initial public offering. So far the IPO date has not been announced.

Pfizer's animal-health unit may be valued at between $15 billion and $18 billion when it separates from PFE, according to a recent Nasdaq report .

"Pfizer Animal Health is a dynamic business with strong fundamentals, an expanding and loyal direct customer base and a proven management team," said Pfizer CEO Read. Read also repeated Pfizer's commitment to launch share buybacks with the proceeds of a prospective sale.
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HTS $12.63 0.00%
NLY $9.73 0.00%
PFE $29.03 0.00%
AAPL $94.02 0.00%
FB $104.07 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

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