Phamaceutical Sector: Merck & Company

Summer Investment Case: a post in the promising pharmaceutical sector. About North American Company Merck & Company which is posting an upbeat earnings per share result. It may well turn out to be a good buy opportunity. The following is from the Investing website Investing.com:

'' U.S. pharmaceutical giant Merck & Company (NYSE:MRK) reported better-than-expected second quarter earnings and revenue figures ahead of Tuesday’s opening bell, sending its shares modestly higher in pre-market trade.

Merck reports better than expected Q2 earnings, revenue

Merck said adjusted earnings came in at $0.85 per share in the second quarter, beating expectations for earnings of $0.81 per share.
The company’s second quarter revenue totaled $10.93 billion, above estimates for revenue of $10.61 billion.
The pharmaceutical company reaffirmed its 2014 revenue forecast and said it expected full-year earnings per share in a range between $3.43 to $3.53.
“We delivered a strong first half of the year, making progress in transforming our operating model, fueling innovation and managing costs, while focusing on our best opportunities”, said Kenneth C. Frazier, chairman and chief executive officer, Merck.
Following the release of the report, Merck (NYSE:MRK) saw shares rise 0.1% in pre-market trade.
Meanwhile, the outlook for U.S. equity markets was higher. The Dow indicated a gain of 0.2% at the open, the S&P 500 pointed to an increase of 0.15%, while Nasdaq 100 added 0.2%.''.

Good Investments to all readers of my Case. And if you happen to be on Holiday Break, a great time of enjoyment and refilling energies is what I recommend. To be ready for another certainly busy fall of the year.

Equity Europe Case

Here today a post on the European Equity Markets Investment case. Dan McCrum at the Financial Times Alphaville with an entry where he comments on the Citi Bank latest Equity report about European Markets and the likely consequences of the recent announcement of ECB's Mario Draghi extraordinary measures. There's a growing expectation, on the positive side about the effects of these measures. Before a major correction.... which might be triggered in the other side of Atlantic Ocean... an European version of Quantitative Easing is becoming highly probable.

We can get a bit of the sentiment of the Citi researchers reading passages like these:

''So says the still optimistic Jonathan Stubbs at Citi, at least. Halfway through the year and the strategy team budge not from their forecast: 20 per cent total return from European equities this year.

''Shares are no longer cheap in absolute terms, but we stay bullish due to: 1) progressive global economic recovery in 2014-15, 2) return to double-digit earnings growth in 2014-16E, 3) super-cheap relative valuations, eg vs credit, 4) rising risk appetite, eg M&A, demand for equity. ECB QE later this year should also be supportive.''

 The sector valuation decomposition is strickingly important, as the consensus is that valuations aren't cheap, as the chart below (... as well as the above) seems to make clear:

''Indeed, the focus list of the bank’s analysts’ 15 to 20 favourite stocks is striking for its inclusion of a few insurers and banks, alongside the target rich environment of pharmaceutical takeover candidates and industrial recovery plays (click to enlarge).''

A sobering insight into Abenomics

In this video from FT's Authers Note we, for those capable of understanding what Mr.Yasunari Ueno says, glimpse why economic policies of lowering wages and low inflation aren't good for the economy as whole, and not good for stock markets either: Abenomics no good