It should surprise exactly no one that Pfizer (NYSE: PFE ) attracts a lot of institutional and retail investor interest -- it's a $156 billion biopharmaceutical company that dates back to before the Civil War. What did surprise me, though, was that last year, it was No. 25 most-owned stock by investment clubs, as measured by the folks at Better Investing. If retail investors were high on the stock, it got me to thinking: What's the consensus sentiment view on Pfizer?
Turns out, the view is mostly bullish. Let's have a look at a few of the key sentiment drivers.
1. Analyst opinion
Analysts really like Pfizer. Data from Capital IQ captures their collective feeling:
||Number of Analysts
Twenty-two analysts have either a "buy" rating or an "outperform" on the stock -- the majority sentiment. A small portion (five) of the analyst crowd deems the stock a neutral "hold," but there's not a single "underperform" or "sell," so we'll classify analyst sentiment as bullish.
2. Insider buying
Next we'll look at insider buying and selling. Over the past year, Pfizer insiders have sold $438,650 worth of their company stock. During the same time period, insiders bought $1,900 in Pfizer shares. (Data from Form4Oracle.)
It'd be nice to see a bit more insider buying to balance out the selling, but $436,740 of net selling isn't at all meaningful relative to the company's $156 billion market cap. Plus, insiders sell stock for a whole host of reasons -- to pay for a house or tuition, to diversify assets, and so forth. For purposes of this exercise, we'll classify insider buying/selling as neutral.
3. Guru buying
Next, we'll look at "guru" ownership of the stock, according to GuruFocus.
In the quarter ended Dec. 31, six gurus were buying Pfizer shares, including Ken Fisher and Don Yacktman. However, there were five sellers in that quarter, Whitney Tilson and George Soros among them. In the previous quarter, the trend was more bullish, with eight gurus buying Pfizer, versus a lone seller.
The recent picture is split, but overall, we'll classify guru sentiment as neutral-leaning-bullish.
4. Retail investor community sentiment
For retail investor community sentiment, I turn to Motley Fool CAPS, our proprietary stock rating system. CAPS generates ratings on a one- to five-star scale, with five stars as the highest ranking, indicating that the Fool community believes in a stock's future. Pfizer has a favorable four-star rating.
Next we'll look at whether short-sellers are circling the stock. There are 58 million Pfizer shares sold short, according to Capital IQ. As a percentage of shares outstanding, that's a short interest of 0.7%. That's not at all high, and so for determining sentiment, we'll classify the low short interest as bullish.
6. Does Buffett own it?
This is the "cherry on top" test, and in this case, it's a no: Berkshire Hathaway does not own shares of Pfizer. (Berkshire instead owns a slug of Pfizer competitors GlaxoSmithKline, Johnson & Johnson, and sanofi aventis.)
Adding it up
The consensus opinion on Pfizer is mostly bullish. Analysts and the CAPS community have a favorable outlook on the stock, and in another positive sign, short sellers are staying away. Gurus are neutral-leaning-bullish, and while insiders are net sellers, the selling has come in doses so small as to make them not meaningful. The only one of our tests Pfizer unequivocally fails is the Buffett test, as Berkshire owns three competitors instead.
Of course, you can't base an investment philosophy on who likes or dislikes the stock you own, and even a consensus bullish opinion can sometimes be a scary thing. Quoting Buffett: "A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful."
The purpose of this series of articles isn't to make a definitive buy-or-sell call on Pfizer. Rather, by looking at a stock's sentiment, the goal is to help you place your own opinion of it in a broader context.
One final thing: If you want to keep tabs on Pfizer's movements, and for more analysis on the company, make sure you add it to your Watchlist.