A Big Upgrade for Pfizer

Every day, the sun rises on Wall Street, and a plethora of professional analysts wake to issue new opinions on stocks. Here at the Fool, we use our "This Just In" column to examine some of these picks -- and the track record of the firm behind them -- so individuals can make better investing decisions.

In addition to following professional banks, anyone can use Motley Fool CAPS to monitor the collective opinions of more than 120,000 members, many of whom demonstrate better investing insight than published analysts do.

More CAPS members are feeling bullish about drugmaker Pfizer (NYSE: PFE  ) recently, upgrading it from its three-star rank to a more formidable four stars. A total of 4,713 members have given their opinions on Pfizer, with many of them offering analysis and commentary explaining the recent optimism.

Panic-stricken investors have fled even high-quality health-care stocks such as Pfizer and UnitedHealth Group (NYSE: UNH  ) , leaving shares priced at levels they haven't seen in years. In the case of Pfizer, the pessimism has won out over a dividend yield of 7.3% and a balance sheet that is loaded with cash, leaving it at a level many investors see as insanely undervalued.

Pfizer's blockbuster drug Lipitor has seen huge growth over the past several years, trumping others like Merck’s (NYSE: MRK  ) Zetia, or Bristol-Myers Squibb’s (NYSE: BMY  ) Pravachol. With the patent deadline approaching on the drug, the company is taking steps to replace its cash flow that will fall victim to generic drugs. To this end, it has been doing some restructuring and expanding into emerging markets like peers GlaxoSmithKline (NYSE: GSK  ) and Sanofi-Aventis (NYSE: SNY  ) have begun doing.

The push outside the U.S. is already delivering 59% of Pfizer's revenue, with third-quarter sales growing 13% internationally to offset a similar decline stateside. And several drugs including Viagra and Lyrica continue to deliver solid returns with double-digit sales growth. The $26 billion in cash and short term investments that sits on Pfizer's balance sheet could also be used to add to its pipeline and is enough even to go after Genzyme (Nasdaq: GENZ  ) or other major players.

In CAPS, more than 88% of the members rating Pfizer expect it to outperform the market. To see what the very best CAPS analysts are saying now about Pfizer -- as well as other winning stocks they are picking -- head on over to CAPS and have a look.

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Fool contributor Dave Mock upgrades his portfolio quarterly with reinvested dividends, because he owns shares of Pfizer. Pfizer and GlaxoSmithKline are Income Investor recommendations. UnitedHealth Group and Pfizer are Inside Value picks. UnitedHealth Group is a Stock Advisor recommendation. The Fool owns shares of UnitedHealth Group and Pfizer. The Fool's disclosure policy can tell if you're lying, so don't even try.


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