In the past month I have had so many spam comments about Phentermine, it’s unbelievable. Phentermine I guess is a weight loss pill. Now, I don’t know why spammers have targeted my blog for this except that at some point in a post I probably mentioned losing weght and voila, now I’m a prime target for this junk.
Its sad enough that people think a pill is going to do what a good nutritional diet and regular exercise do naturally. There is no magic bullet or pill that is going to shed unwanted pounds, no matter how scientifically proven it is.
That being said, sometimes you don’t know what to write about and that’s where I got the idea for this post.
You want to make sure you check your Akismet folder as often as you can stand it. My eyes nearly blurred at all the same phrases I was seeing. One of the good things though is I didn’t see a lot in terms of content scraping. Either those idiots stopped pulling my feeds or they took down their blogs. That stuff is out of control. Many a time I have had to move comments back out of the Akismet folder so they would show up. I do wish however that I got some kind of notification…instead I just have to remind myself to check the folder.
None of this really has to do with investing…unless of course you own a pharmaceutical company that makes Phentermine.
So I set out to determine what this magic drug was and who makes it.
According to the wikipedia entry, Phentermine was created in the late 1950s to help at-risk obese patients curb their appetites along with a healthy diet and regular exercise and behavioral modification to help them lose weight. Now this makes sense…as I do believe something like that in combination with regular exercise and diet can lead to a healthy lifestyle. The drug is only meant to be used short term until such time as a patient can handle the diet and exercise on their own.
Who makes this miracle drug?
- There are actually several companies that make it. The generic form of the drug is called Phentermine Hydrochloride. GATE Pharmaceuticals manufacture Adipex, the leading name brand. GATE Pharmaceuticals is a division of TEVA Pharmaceuticals USA, a subsidiary of Teva Pharmaceutical Industries, Ltd., Israel’s leading pharmaceutical company.
- Celltech Pharmaceuticals, Inc. makes Ionamin®
- Duromine® is manufactured and supplied in Australia by 3M Pharmaceuticals Pty Ltd.
- Generic forms are made by Sandoz in the United States.
Now for the nitty gritty.
I could only find stock data on two of the companies listed here.
Teva Pharmaceuticals USA(TEVA) and 3M (MMM).
First, let’s look at Teva.
The 3 month chart looks like a roller coaster with nice swings up and down. The 52 week high of $50.00 was on February 27th, nearly a month ago. Since then it has retraced back to 45 and is on the way up again. Teva is trading at 19 times earnings with a current EPS of 2.38 and they also pay a $.12 cent dividend which is only 1%…not that great. If we are looking for value, it should be trading at 23 times earnings giving you a price of $54.78. So I see some upside here with Teva. With the kind of share volume trading it can easily hit the 52 week high, probably higher since we are also heading into beach season with spring break and the summer on its way here in the US.
3M is also off the 52 week high and on a rebound. Their chart is a little rockier.
Overall its looking flat, but let’s check the numbers to be sure. Currently 3M trades at just under 15 times earnings which is low according to earnings estimates. It should be trading at 20 times earnings, pricing the stock at $116.00. However, pharmaceuticals aren’t the only thing 3M does, so you are seeing other factors here affecting the price and movement of the stock. The 52 week high set in October 2007 was $97, 17 points above where its at now. 3M also pays a dividend of $.50 cents which is a 2.47% yield…better on the dividend than Teva, but in terms of which of these two can make you money, I have to go with Teva.
Do I think 3M can hit $116 where it would be fairly valued? It’s possible. The volume is there but both of these candlesticks indicate a wait signal. That usually means stay on the sidelines in cash until a definite trend emerges. So although MMM has a higher dividend, it’s not the only reason to invest in a stock. I prefer the 4-5 point upside here and possible breakout in Teva to the stagnant action in 3M. Of course, that’s just my opinion…
I do not own any positions in stocks mentioned.
