Two Ways To Play: Merck Cured of Negative Outlook

Terry Woo  Aug 25, 2008 4:47 pm

Two Ways To Play: Merck Cured of Negative Outlook
 
Strengthen your portfolio in good times and bad.
 

 
According to Bloomberg, Moody’s Investors' Service raised the outlook for Merck’s (MRK) debt because it viewed the drug maker’s decision to begin making payments on legal settlements as a positive.

Merck said last week that it will start mailing payments on some $4.85 billion in settlements to former users of the painkiller Vioxx. The actions prompted Moody’s to affirm Merck’s existing Aa3 long-term debt and Prime-1 short-term debt ratings as well as lift its outlook for the company from negative to developing. Moody’s said the company’s conservative fiscal policies countered “pressures” facing sales of Vytorin and Zetia cholesterol pills. The ratings agency says about $5.1 billion of debt securities are affected by the ratings.

From the Bull Pen
: We mentioned earlier this morning a few plays in the biotech sector. Bulls can also consider Celgene (CELG) with supports near $70 and $65 as points to consider.

From the Bear Cave: The positive statements from Moody’s may provide some relief to Merck bulls, but bears recognize that the long-term trend line is down for the stock. A downside play might exist if and when the stock reaches the $40 mark.
Rate this article:  (0 Votes)
Comment (0) See All Comments »
discuss this article and more on the mv exchange
No positions in stocks mentioned.

Get real-time options trading ideas from Steve Smith, veteran options trader and newsletter author, plus let him show you the way to cut risk and boost your returns through the strategic use of options.  Click here for a free 14 day trial to OptionSmith by Steve Smith.



The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2009 Minyanville Media, Inc. All Rights Reserved.

Ticker Talk
Popular Tickers:
SPX »AMZN »F »
Select
  •  
Talk Now
Share this Talk on your site:
Send us your feedback

Our Professors

rss article alert