Tim Brown: Win With Wyeth
Blocking and tackling. They're the foundation and building blocks of football.
Blocking, especially, is a part of the game that gets little fanfare. Fans don't notice the dirty work in the trenches unless a player misses his assignment. It really is not a glamorous job, but requires a lot of blood and guts.
Tackling is more visible, but many of the tackles in most games come and go without great attention. It's the big hit or the open-field missed tackle that is splashed on ESPN. With these jobs, you only get noticed if you mess up, but they are so essential to the success or failure of any team.
If a quarterback doesn't have protection, he will never have the time to throw the ball. If a running back has no blocking, he isn't going anywhere. And if a defense can't tackle, receivers and backs will have their way with them.
Things don't need to be flashy to be important. The same goes for solid companies.
Today I like
Wyeth
(WYE)
. The company has three main business areas. Its pharmaceuticals unit offers biotech and pharmaceuticals products including vaccines and nutritional products, and its consumer health care segment provides over-the-counter health care products -- things like cough/cold/allergy medicine and nutritional supplements.
The company also has an animal health group that offers animal biological and pharmaceutical products like vaccines and parasite control products. Wyeth sells its products to health care professionals, such as wholesalers, pharmacies, hospitals, physicians, retailers and other health care institutions.
In a rocky market, I like this company because it produces products people need even if they hit tough times. Peopleget sick or try to prevent getting sick no matter what the market is like.
Wyeth has solid revenue, $23 billion, $5.21 billion in operating cash flow and $13 billion in cash on hand. Its forward price-to-earnings ratio is 12.10. The company has a return on equity of more than 26%.
Despite that sheet, I think Wall Street has undervalued this stock. It closed at $44.40 yesterday. It is up a little from its lowest point in the last year, which is $38.39. However, it's still well below its 52-week high of $62.20 and is down more than 23% in the last year.
I like the numbers and think this company should keep chugging toward the goal.
"Keep moving the chains!"
At the time of publication, Brown had no positions in stocks mentioned, although positions may change at any time.
Tim Brown played 16 seasons in the NFL, where he made nine Pro Bowls. After a brief stint with the Tampa Bay Buccaneers in 2004, Brown retired as an Oakland Raider. He was a Heisman Trophy winner in college for Notre Dame.