Drugs At A Discount
Over the past 10 years, leading drug stocks traded at an average price/earnings ratio of 25. Today, their average P/E ratio is just 16.6, and some large pharmaceutical stocks pay substantial dividends.
The industry's current problem is that companies don't have enough blockbuster drugs in development to replace all the important drugs that will be losing patent protection over the next few years. However, thanks to the aging Baby Boomers, we can expect total spending on prescription pharmaceuticals to grow faster than the overall economy.
A well-diversified portfolio should include drug stocks, and you might want to shore up your holdings now while they trade at relatively low prices.
* * * * *
The industry's current problem is that companies don't have enough blockbuster drugs in development to replace all the important drugs that will be losing patent protection over the next few years. However, thanks to the aging Baby Boomers, we can expect total spending on prescription pharmaceuticals to grow faster than the overall economy.
A well-diversified portfolio should include drug stocks, and you might want to shore up your holdings now while they trade at relatively low prices.
* * * * *
posted by Bob Moser at
8:46 PM
0 Comments:
Post a Comment
<< Home