We recently published a list of Jim Cramer’s Latest Portfolio: Top 9 Stocks to Buy and Sell. Since Pfizer Inc. (NYSE:PFE) ranks 3rd on the list, it deserves a deeper look.
Jim Cramer is exuberant about the Federal Reserve’s aggressive rate cut.
“Believe me, there are few things more friendly than a 50 basis point rate cut,” Cramer said in a recent program.
The CNBC host said that he has reminded his viewers repeatedly that when the Fed is your “enemy” you should stick to recession-proof stocks that can produce consistent earnings despite market slowdowns.
“Once the Fed is done tightening and we start seeing signs of impending rate cuts you need to load up on the cyclicals, the companies that see massive earnings growth when the economy accelerates,” Cramer reminded his viewers about his advice on how to play the interest-rate game.
Jim Cramer has been talking about all sorts of stocks during his latest programs. In this article we picked 9 important stocks he’s bearish/bullish on and analyzed these companies in detail. With each stock we have mentioned its hedge fund sentiment. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Pfizer Inc (NYSE:PFE)
Number of Hedge Fund Investors: 84
Jim Cramer in a latest program on CNBC said that he “likes” Pfizer Inc (NYSE:PFE) at the current levels and the company’s 5.6% dividend yield.
Cramer also said he likes Pfizer’s “cancer strategy.”
Pfizer Inc (NYSE:PFE) is down about 3% so far this year as the market is still reluctant about the company’s path forward beyond its COVID revenues. However, the bulls believe there are plenty of growth catalysts for the company.
Its $43 billion acquisition of Seagen will play a key role in its oncology portfolio. Pfizer Inc (NYSE:PFE) potential success with antibody-drug conjugates (ADCs) is also worth watching, as these treatments could boost its oncology division’s performance. In the second quarter, Pfizer’s oncology revenue jumped 27% year-over-year, highlighting solid execution in this growth area.
What about the weight loss industry? Pfizer Inc (NYSE:PFE) is a clear laggard in this area when compared to rockstars like Eli Lilly and Novo Nordisk. However, the company plans to position its product Danuglipron competitively, with a large-scale phase III trial in the works.
Pfizer Inc (NYSE:PFE) is also focusing on cost-cutting efforts, targeting over $4 billion in savings. Additionally, its manufacturing optimization plans could reduce operating expenses by another $1.5 billion by 2027.
PFE’s forward adjusted PEG ratio of 1.16, about 40% below the industry median. Based on the above-mentioned catalysts, the stock could be a promising buy for long-term investors.
Parnassus Value Equity Fund stated the following regarding Pfizer Inc. (NYSE:PFE) in its first quarter 2024 investor letter:
“During the quarter, we added new positions in Pfizer Inc. (NYSE:PFE), NICE and Charter Communications. We purchased Pfizer to capture the potential upside from any turnaround following the COVID-induced boom-bust cycle of the last few years. Pfizer’s stock price sank by more than 40% in 2023 as COVID-19 vaccine revenues rolled off, providing an attractive entry point for us. The company completed its acquisition of Seagen, which should strengthen Pfizer’s pipeline in antibody-drug conjugates (ADC). Pfizer also offers an attractive dividend yield.”
Overall, Pfizer Inc. (NYSE:PFE) ranks 3rd on Insider Monkey’s list titled Jim Cramer’s Latest Portfolio: Top 9 Stocks to Buy and Sell. While we acknowledge the potential of Pfizer Inc. (NYSE:PFE), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PFE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
