Billionaire Prem Watsa’s 10 Stock Picks With Highest Potential

7. Merck & Co., Inc. (NYSE:MRK)

Number of Hedge Fund Holders: 91

Fairfax Financial Holdings’ Stake: $17.20 Million

Analysts’ Upside Potential as of April 21: 40.20%

Merck & Co., Inc. (NYSE:MRK) is a healthcare company that develops and markets a wide range of products and solutions, including pharmaceuticals, scientific tools and technologies. While the company has been under pressure due to a persistent decline in its Human Papillomavirus (HPV) 9 vaccine batch approvals in China, analysts at UBS insist the stock is a Buy with an average price target of $105.

While HPV approvals were down by 57% in the fourth quarter of 2024, they significantly increased in March. The increase came amid a challenging environment in China and a ferocious trade war between Beijing and Washington. Merck & Co., Inc. (NYSE:MRK) delivered solid Q4 2024 results with adjusted EPS of $1.72, $0.04 above consensus estimates and $15.62 billion revenue above the estimate of $15.52 billion and up 7% year-over-year.

The robust revenue growth comes from the company expanding its footprint in the speciality pharmaceutical and oncology segment, with Keytruda as a key revenue driver. Nevertheless, Merck & Co., Inc. (NYSE:MRK) disappointed the market by providing 2025 sales guidance of between $64.1 billion and $65.6 billion, well below consensus estimates of $67.4 billion. On the other hand, Merck continues to reward investors with a 4.16% dividend yield for generating passive income.