Big pharma is in big trouble, with looming patent expirations and drug generic competition weighing on health care stocks. While many health care companies are still soundly profitable, there’s no doubt that investors are thinking twice about drugmakers and pharmaceutical stocks in the long term.
Looking at the fundamentals, there are 7 big pharma health care stocks that I see as big losers in the weeks and months ahead. These drug stocks should be sold immediately.
Abbott Laboratories: The first big pharma stock worth selling is Abbott Laboratories (NYSE: ABT), which has dropped -14% in the last year, compared to gains by the broader markets. The stock may have rebounded in October, but has since dropped -10%, putting it right above its 52-week low of $44.59
Bristol-Myers Squibb: Global pharmaceutical company Bristol-Myers Squibb (NYSE: BMY) has watched its stock price fall -6% since the start of October. Analysts are also projecting a three cent drop in earnings this quarter compared to last year. Ignore this stock until it proves it can turn it around.
GlaxoSmithKline: Vaccine and OTC medicine producer GlaxoSmithKline (NYSE: GSK) posted a dismal quarterly revenue growth of -11% in its last income statement, year-over-year. Not helping matters is GSK’s dwindling stock price, down -9% since mid-October.
Johnson & Johnson: Consumer staple Johnson & Johnson (NYSE: JNJ) is in the midst of its second large stock swoon of the past calendar year, down -5% since November. Earnings wise, analysts are expecting a four cent drop in EPS compared to this quarter last year. Just because you own JNJ products doesn’t mean you should own this stock.
Merck & Co: Over the past 12 months, Merck & Co. (NYSE: MRK) has dropped -13% overall, and the stock is down -11% since the start of 2011. Stockholders can’t be pleased with the company’s net profit margin, which sat at -4% last quarter.
Novartis: Switzerland-based Novartis AG (NYSE: NVS) may have had a nice finish to 2010, but is down -3% since the start of 2011. Experts predict that NVS will also miss its EPS from last year by 12 cents this quarter.
Teva Pharmaceutical: Last on the list is Teva Pharmaceutical Industries (NASDAQ: TEVA) which has posted a loss of -15% in the last 52 weeks. After bouncing back towards the end of 2010, TEVA has since declined another -2%.
As of this writing, Louis Navellier did not own a position in any of the stocks named here.