Scott Richter, portfolio manager of the Fifth Third Disciplined Fund, has two prescriptions for investors’ portfolios.
His first pick is drug manufacturer Forest Laboratories .
“We like their business model. Their business model is to commercialize and market drugs as opposed to develop them through R&D. Secondly, we like the pipeline… Lastly, they have a ton of financial flexibility, meaning they have almost $2 billion in cash on the balance sheet. They also have about $900 million per year in free cash flow.”
Schering-Plough is another stock Richter likes in the pharma sector.
“They’re in the best position with respect to the patent cliff. They have very little generic competition as well. They have a nice pipeline, too, specifically a rheumatoid arthritis drug as well as an anti-platelet drug, and we like their management.”
Disclosure information was not available for Richter or for his company.