Big Pharma is Taking Off… Are You on Board?
by Jeff Clark
July 28, 2006

Most of my subscribers are probably sick of it by now…

Early this year, I recommended taking a large position in giant drug companies like Pfizer, Merck, and Johnson & Johnson. Back then, this sector (popularly known as “Big Pharma”) had just about everything NOT going for it…

First it was Merck and the Vioxx scandal. Then came Pfizer and problems with Celebrex...then ordinary painkillers such as Advil and Tylenol were called into question.

Once the pain killer rug was pulled out from underneath the pharmaceutical companies, it was time to target statins...

First it was bad news for AstraZeneca's Crestor...followed by worries about Pfizer's Lipitor and Merck's Zocor... Pravacol, made by Bristol-Meyers Squibb, has cause for concern as well.

And like clockwork, lawyers came out by the hundreds to sue these companies. After all, what self-respecting class action attorney isn't going to drool over headlines like "Doctor Says Vioxx Can Cause Heart Attacks"?

Given all this negative sentiment and historically cheap valuations, I’ve repeatedly told my subscribers that this sector is going to be one of the most profitable places to have your money for the next few years…

And given the action of the past few weeks… this trend is starting to pick up steam. Just look at how the Pharmaceutical ETF has performed over the past two months:

While the S&P 500 is down 1% and the Nasdaq Composite Index is 7% lighter, the Pharmaceutical HOLDRs Trust (PPH) is actually up 6%!

That impressive performance is largely attributable to the exchange-traded fund’s large positions in stocks like Johnson & Johnson (JNJ), Abbott Laboratories (ABT), and Merck (MRK). These stocks, which have vastly underperformed the market over the past three years, have finally bolted into leadership mode.

The impressive performance of the pharmaceutical sector over the past two months is just a small taste of what we’re going to see over the next year or so.

So if you’re not exposed to this sector, then do yourself a favor and get exposed. And keep reading the Growth Stock Wire for updates…

Best Regards & Good Trading,

Jeff

Interesting Article About China's Crude Oil Policy
“If your life depended on drinking a glass of milk every day, would you buy a cow?

That's the question Chinese planners must ask themselves as they evaluate their push to buy energy assets from Sudan and Angola to Iran, an effort that has prompted the country's state- owned oil companies to spend $15 billion in the past five years.

Agreed, the world's second-biggest auto market after the U.S. needs every drop of oil it can get. And China isn't the only country that has begun to equate energy security with physical possession of oil-producing assets.” Read On…

Big Oil Gets Bigger
“ExxonMobil (XOM), the world's largest public oil company, said Thursday that quarterly profit surged 36%, pushed up by another quarter of sharply higher oil prices.

Net income in the second quarter was $10.36 billion, or $1.72 a share, compared to $7.64 billion, or $1.20 a share, in the year earlier quarter. It was the second largest quarterly profit ever recorded by a publicly traded U.S. company.

Analysts on average expected a profit of $1.64 a share, according to Reuters Estimates. The results topped Wall Street expectations but came in behind ExxonMobil's record profit of $10.71 billion set in the fourth quarter of 2005.” Read On…

•
Earnings today: Chevron, Lear, Waste Management, White Mountain.

•
Royal Dutch Shell joins ExxonMobil and Chevron on the list of supermajor oil stocks at new 52-week highs.

•
Beer and liquor stocks at new highs: American giant Anheuser-Busch, British giant Diageo.

• Natural gas climbs above $7.

Last Change 52-Wk

S&P 500 1268.40 -0.04% 3.02%

Oil (USO)* 69.17 0.25% 1.96%

Gold (GLD)* 62.00 0.73% 46.75%

Silver (SLV)* 111.07 1.04% -19.58%

US Dollar 85.85 -0.92% -4.66%

Euro 1.2712 1.07% 5.85%

VIX 14.62 -1.55% 33.03%

^HUI 327.76 1.09% 66.81%

10-year yield 5.04% -0.03 0.80

* Since ETF inception

Company	Sym	Industry
Chevron	CVX	big oil
ExxonMobil	XOM	big oil
Royal Dutch Shell	RDS.B	big oil
Marathon Oil	MRO	oil
Occidental	OXY	oil
Western Refining	WNR	refiner
Western Gas	WGR	natural gas
AGL Resources	ATG	natural gas
British Airways	BAB	airline
Merck	MRK	big pharma
Anheuser-Busch	BUD	beer
Diageo	DEO	beer
Bank of America	BAC	banks
Harley Davidson	HDI	hogs
CVS	CVS	drugstores
Snap-on	SNA	tools
Bellsouth	BLS	communications
AT&T	T	communications
Comcast	CMCSA	cable
Featherlite	FTHR	motorcoaches
Mothers Work	MWRK	maternity clothes

Company	Sym	Industry
MGM Mirage	MGM	gaming
Gaylord Ent.	GET	entertainment
Royal Carribean	RCL	cruise lines
Callaway Golf	ELY	golf clubs
Levitt	LEV	homebuilder
Dominion Homes	DHOM	homebuilder
Zip Realty	ZIPR	realtors
Scott's Miracle Grow	SMG	fertilizer
Dow Chemical	DOW	chemicals
Aetna	AET	insurance
Urban Outfitters	URBN	retail
Pacific Sunwear	PSUN	retail
Cutter & Buck	CBUK	retail
Chico's	CHS	retail
Overstock	OSTK	online retail
Educate	EEEE	education
XM Satellite Radio	XMSR	satellite radio
Lo Jack	LOJN	vehicle recovery
Lee Enterprises	LEE	newspapers
Dreamworks	DWA	animation

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Big Pharma is Taking Off… Are You on Board? by Jeff Clark July 28, 2006

Big Pharma is Taking Off… Are You on Board?
by Jeff Clark
July 28, 2006