Both $Merck(MRK)$ and $Pfizer(PFE)$have scheduled to announce their second-quarter earnings results on July 28. I like the healthcare sector for its defensive nature amidstprevailing growth uncertainty and market volatility in the broader market. Headwinds from rising costs and interest rate hikes to tame the surging inflation is likely to put pressure on the profit margins and cash-flow valuations. However, the healthcare sector will be more resilient given its price inelasticity of demand for healthcare, as there is usually no effective substitutes for proven drugs for specific diseases and one is more likely to sacrifice a holiday rather than medication and medical treatment for survival. I prefer pharmaceutical companies like MRK and PFE, as unlike start-ups like $Moderna, Inc.(MRNA)$ and $BioNTech SE(BNTX)$, they are not reliant on only COVID-19 vaccine, and they own long lists of cash cows from proven drugs as well as robust pipelines of new drugs in various stage of clinical trials for future cash flows generation. The cash cows will help to finance the experimental drugs which may take years to complete clinical trial and gain regulatory approval, many of which fail in the course. Hence, I would dollar-cost average into MRK and PFE for exposure to the healthcare sector.
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Praising Pfizer? for what? if they were really good, the shARE PRICE would at least be 200, by now. We all know their results by now, earning in billions.