My Favorite Way to Play the Pharmaceuticals

By Matt Thalman – Aug 31, 2013 at 12:00PM

NYSE: MRK

Merck

Market Cap

$322B

Today's Change

(0.10%) $0.12

Current Price

$127.00

Price as of April 24, 2024, 4:00 p.m. ET

While the brand-name drug companies may be more exciting, they may be more risk than they're worth.

In the following video, Fool contributor Matt Thalman discusses how he plays the pharmaceutical industry. While the likes of Pfizer (PFE -0.19%) and Merck (MRK 0.10%) may be the first names that come to mind, Matt doesn't think they're the best investing choices, as he thinks the major drug companies don't offer the correct amount of reward to compensate for their risk.

That's why Matt prefers generic pharmaceutical companies. Mylan Pharmaceuticals (MYL) and Teva Pharmaceutical Industries (TEVA) are two of the big names in this market, and Matt says investors might consider looking here for a combination of less long-term risk but a strong potential for good returns.

Fool contributor Matt Thalman owns shares of VIVUS and Mylan. Follow Matt on Twitter: @mthalman5513.

The Motley Fool has no position in any of the stocks mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.