There’s an innovative biotech company with a wide range of products and a stock price that is being unfairly held down. That makes it an attractive value and today’s Stock of the Week.
Amgen Inc. (AMGN) is an exceptionally innovative company being held back by general uncertainty over the course of health care in coming years. This gives investors a chance to buy the stock when it is, in effect, on sale.
Amgen makes drugs for cancer, rheumatoid arthritis, kidney disease, anemia, high cholesterol and other conditions. It has many new medicines in its development and testing pipeline and maintains a strong commitment to research. The biotech industry has major opportunities as the population ages and more people develop conditions that Amgen’s drugs can treat.
The industry and company do face threats of price limits and generic and biosimilar competition for some drugs—but in Amgen’s case, these are not major factors, and in fact, Amgen itself is making biosimilar versions of some other firms’ medicines. Most concerns are already figured into Amgen’s share price. Also, Amgen just won a key patent ruling protecting its cholesterol-lowering drug Repatha.
Management is maintaining an excellent balance sheet while buying back stock. Revenue of $21.7 billion in 2015 should be reported to have grown to $22.8 billion for 2016 and should reach $23.5 billion in 2017. The dividend of $4.60/share/yr. recently yielded 2.94% and appears secure.
Earnings per share: 2017 est./$12.43… 2016 est./$11.56… 2015/$10.07.
This Week’s Expert
John Buckingham is chief investment officer, Al Frank Asset Management, Inc., Aliso Viejo, California, which manages $600 million, including the $72 million Al Frank Fund (VALUX). AlFrankFunds.com