Feature

What the experts say

Give Big Pharma a chance; Taxes: Go it alone or hire a pro?; Trim your grocery bill

Give Big Pharma a chance
Investors usually flock to pharmaceutical stocks when the economy is under the weather, said Conrad De Aenlle in The New York Times. But recently the sector has been dragged down by generic competition and talk of health-care reform. Still, some experts say all this creates a buying opportunity. “Most of these companies are trading at very low multiples of earnings,” says Damien Conover, an analyst at Morningstar. Merck stock, still reeling from bad news about its cholesterol drug Vytorin, now trades at just 12 times earnings—a valuation that underestimates Merck’s tried-and-true cardiovascular and diabetes drugs. Pfizer trades at less than 10 times its 2008 estimated earnings, and has a 5 percent dividend yield to boot. Other deals can be identified throughout the sector, according to Barry Ogden, manager of the Ivy Capital Appreciation fund. “At these valuations, you’ve got to be predisposed to build positions in some of these names,” Ogden says.

Taxes: Go it alone or hire a pro?
Last year, 60 percent of Americans hired a professional to do their taxes, said Lawrence Lanahan in Money. “And they paid dearly,” whether shelling out 100 bucks for a simple return at H&R Block or running up much higher CPA bills for complex returns. “You may want to go pro if you need to file many forms, claim mega-deductions, carry forward losses, or take depreciation.” The same is true if 2007 marked a move, marriage, divorce, or other milestone that could throw your taxes for a loop. But for relatively simple returns with income limited to wages, interest, and some investments, consider taking an afternoon and just doing your own taxes. Programs and websites such as TurboTax and TaxCut can cost as little as $20 and are “more foolproof and intuitive than ever.”

Trim your grocery bill

Food prices shot up more than 5 percent in 2007—the largest increase in almost two decades, said Kelli B. Grant in SmartMoney. They’re expected to spike even further in 2008. “With a little legwork,” though, you can keep your grocery bills in check. Start by stockpiling favorite foods when they go on sale. Most items are discounted just once during a 10- to 12-week sales cycle, says Teri Gault, founder of TheGroceryGame.com. To score the best savings, shop on Sunday, “armed with the fresh batch of coupons from your Sunday newspaper and the weekly sales circular.” Search aisles for unadvertised discounts and even consider goods approaching their sell-by date. “These items are perfectly safe to eat, even several days after purchase.”

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