With the XPH returning about 11% over the past year, can the relatively defensive Pharma sector continue to perform?The short answer is yes.Deutsche analyst Barbara Ryan points to a string of reasons she expects the sector to continue higher. - low valuations- benefit from risk-off - high dividend yield- growing cash flows - share repurchases and dividend increases- product pipelines are improving.
Those are the factors that drove multiple expansion in 2011 and she expects those same factors to work just as effectively in 2012.She tells us her top 3 picks in the space are Merck, Pfizer and Bristol Myers .Pete Najarian agrees with Ryan entirely. “I hold a piece of every one of these,” he reveals. And he also likes Lilly. “That’s another one where you get a great dividend yield and good valuations.”
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