Why Pfizer's buyback may be bad medicine for the stock

Pfizer found a new way to lift things up.

The drugmaker announced a new stock buyback program to the tune of $11 billion. That sent the stock up 2 percent on Friday.

However, Pfizer shares are still down 5 percent in 2014 and not everyone thinks a stock buyback is such a great idea, especially as drug companies need to spend billions of dollars on research and development or acquisitions.

(Read: Pfizer's $11 billion buyback plan deflates AstraZeneca bid hopes)

"They (Pfizer) should be out looking for more growth instead of just buying back stock," said Andrew Burkly, head of institutional portfolio strategy at Oppenheimer & Co. "Even with the big buybacks they've had before and the one they announced now, it's really not doing a whole lot."

Instead, Burkly would rather see the company up its dividend. "Increasing the dividend would probably be a better use of the cash to make this a more attractive yield play," he said. "Overall, Pfizer doesn't do a whole lot for me and the buyback really just prolongs the story of no growth and lackluster opportunity."

But Todd Gordon, founder of TradingAnalysis.com, is more optimistic on Pfizer based on its charts. "This is a time where the fundamentals are diverging from the technical," he said. "Technically speaking the chart looks very good."

Gordon sees technical significance in the $28.50 per share level. That was close to the stock's 2006 highs. Since breaking above that level over the summer, the $28.50 mark has gone from being resistance to serving as support, according to Gordon's charts. "We're now using this $28.50 as kind of a shelf," he said.

(Read: Baxter's blood disorder drug gets FDA approval)

Looking at a slightly shorter-term chart, the stock has traded in a well-defined upward trading channel. Within that channel, the stock has had three pullbacks of around $5 to $6 each: in 2010, 2011, and in 2014.

"Markets are patterned and structured," said Gordon, explaining why he sees significance with those pullbacks. "They're not random. So I actually like the stock above $28 and any weakness, I'd like to buy to be long with clients."

Burkly, however, sees better opportunities elsewhere in the pharmaceutical space, particularly Johnson & Johnson and Bristol-Myers Squibb. "Both of those have some growth prospects and the analysts have actually been raising their numbers instead of cutting their numbers," he said. "We like health care. Just Pfizer is not one in particular that we like."

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