Top Stock Pick of the Year: MRK

Alphanso’s AI Stock Research picked MRK as one of the top stocks of the year.

Alphanso Rating: 9/10

Return Potential: 17%

MRK (Merck & Co Inc)stands out due to its enticing low downside risk and high potential rewards.

Fundamental Metrics:

1. Free cash flow yield of ~4% indicates the company’s ability to operate at will  making it a very sustainable business
2. EBITDA margin of 21% vs sector median of 5% suggests strong pricing power and economies of scale.
3. The ROE of 7% vs sector median of -22% indicates that its management is highly efficient and shareholder-friendly.
4. The US FDA has expanded Merck’s ebola virus vaccine to people 12 years and older. On July 20, the European Medicines Agency recommended expanding the indication for the shot for 1 year old and over.

Technical Metrics:

Based on the Alphanso model, the stock is trading below the expected channel (range) of $ 119 – $126