Two Ways To Play: Merck Cured of Negative Outlook
Strengthen your portfolio in good times and bad.
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.
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 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter