There’s a lot of talk about the recently passed health-care reforms in the wake of the election, and some investors are wondering if provisions of the legislation could be rolled back. I won’t pretend to know what’s going to happen in Washington in the future, but I can tell you that no matter what happens to the so-called “Obamacare” initiative, a number of health-care stocks are in dire straits — and no amount of politicking is going to help them.
Specifically, I’m talking about a group of battered drug makers that have seen poor earnings performances lately and are up against looming patent expirations and fierce competition in emerging markets.
Here are five famous pharmaceutical stocks that you should sell immediately:
Abbott Laboratories (ABT)
Abbott Laboratories (NYSE: ABT) is engaged in the discovery, development, manufacture and sale of a variety of health-care products. Since January, ABT stock has dropped 6.6%, compared to gains of 9.5% and 9.3% for the S&P 500 and Dow Jones, respectively. While the stock regained slightly in September, ABT has lost 3.5% since October. While ABT has outperformed earnings estimates for four consecutive quarters, it has been by only one cent each quarter. Abbott stock currently trades at $50.45.
Sanofi-Aventis S.A. ADS (SNY)
Sanofi-Aventis (NYSE: SNY) is also involved with the research, development, manufacture and marketing of health-care products. The company is known for its pharmaceuticals, including vaccines, as well as its animal health-care products. Year-to-date, SNY stock has slid 9.4%. Additionally, Sanofi-Aventis has missed earnings estimates two of the last three quarters. While the stock has regained slightly in the last few months, it is still down from its 52-week high of $41.59, with a current price of $35.62
Teva Pharmaceutical Industries (TEVA)
Global pharmaceutical company Teva Pharmaceutical Industries (NASDAQ: TEVA) produces and markets a wide range of generic drugs. Its major products are Copaxone for multiple sclerosis and Azilect for Parkinson’s disease. Since January, TEVA is down 9.6%, compared to gains by the broader markets. After a productive September, TEVA has dropped 3.7% since the start of October. Trading at $50.80, TEVA is only a few dollars removed from its 52-week low of $46.99.
GlaxoSmithKline PLC ADS (GSK)
GlaxoSmithKline (NYSE: GSK) works with vaccines, over-the-counter medications and various other health-care consumer products. The company’s main products deal with the following: respiratory system, central nervous system, cardiovascular and urogenital, metabolic, anti-bacterials, oncology and emesis, dermatalogicals and vaccines. GSK stock is down 4.1% in 2010, despite seeing gains in September and October. Additionally, GSK reported a quarterly earnings drop of 3.5% in its last income statement, which certainly has disappointed shareholders.
Pfizer Inc. (PFE)
Research-based, global pharmaceutical company Pfizer Inc. (NYSE: PFE) rounds out the list of big pharma stocks to sell. Year-to-date, Pfizer has watched its stock decrease 6.5%, compared to gains by the broader markets. Analysts aren’t buying into Pfizer, as they have downgraded their earnings estimates to 47 cents a share this quarter after and actual EPS of 54 cents a share last quarter. A quarterly earnings decline of nearly 70% is another reason why Pfizer is a stock worth selling.
As of this writing, Louis Navellier did not own a position in any of the stocks named here.