Stock (Symbol) |
Amgen (AMGN) |
Stock Price |
$178 |
Sector |
| Healthcare |
Data is as of |
| March 9, 2017 |
Expected to Report |
| Apr 26 – May 1 |
Company Description |
 Amgen Inc. (Amgen) is a biotechnology company. The Company is engaged in discovering, developing, manufacturing and delivering human therapeutics. The Company’s sales and marketing forces are located in the United States and Europe. In the United States, it sells its products to pharmaceutical wholesale distributors. The Company also markets certain products directly to consumers through direct-to-consumer print and television advertising, as well as through the Internet. Outside the United States, the Company sells its products to healthcare providers and/or pharmaceutical wholesale distributors. The Company’s products include Neulasta (pegfilgrastim)/NEUPOGEN (filgrastim), Enbrel (etanercept), XGEVA/Prolia (denosumab), ESAs (erythropoiesis-stimulating agents), Sensipar/Mimpara (cinacalcet), Kyprolis and Evolocumab, among others. Source: Thomson Financial |
Sharek’s Take |
 Amgen (AMGN), the world’s largest Biotech company, has been one of the finest investments the past 30 years, traveling from $0.75 in 1987 to $15 in 1997, $60 in 2007 and $180 now (today, 3/16, quote). Amgen is one of America’s safest stocks. In addition to paying more than a 2% yield, management buys back stock to help boost profits. systematically underpromises to overdeliver and has a successful R&D department developing new drugs. Although this is a large company, Management juggles creating new drugs while growing profits every year for the past decade. In 2011 AMGN became the first biotech to start issuing dividends and has increased the dividend each year since — from $0.56 to $4.00 in just 6 years. Since 1995 AMGN’s failed to deliver record profits just twice (2006 & 2007). And after all these years AMGN still grew profits 12% last year (plus payed a 2% yield). The company has multiple blockbusters on the market, and a robust pipeline with 10 new drugs expected by 2019 including late stage drugs to combat osteoporosis, migraines and heart failure. And in January, AMGN won a patent war with Regeneron, with Regeneron’s LDL cholesterol drug getting banned. People felt Regeneron would pay a royalty, but nope Amgen said no deal. AMGN has an Estimated Long-Term Growth rate of 7% per year but management has beaten analyst estimates for at least the last 9 qtrs. And the stock has a reasonable P/E of 14. Although AMGN is close to my 2017 Fair Value of $185, I still think it has the momentum to carry itself higher. |
One Year Chart |
 Last qtr AMGN grew sales 8% and profits 11%, which beat the 7% analyst estimate. The stock has done very well since the election — that must mean a good political backdrop for Biotech stocks. Last year AMGN management said it wouldn’t raise prices in 2017, maybe it has the leeway to now. Notice profit growth has been 11% or more in each of the last 4 qtrs. This company know the drill of keeping estimates low then beating them. Estimates are for 3%, 10%, 4% and 7% profit growth the next 4 qtrs. |
Fair Value |
 I should really take the P/E up on this stock, but let’s see if we can get a little rally going first. Looking at the ten year chart, AMGN hasn’t had a P/E of more than 16 all decade. But with results coming in so splendid I can envision the stock continuing higher. |
Bottom Line |
 Amgen just broke out and it should be going higher. But the stock market has also been moving up pretty much since the election, and I feel the market needs to take a breather. Thus, I’m leaving my predictions low on this stock until later in the year. Still, AMGN is timely and the trend is your friend (the trend is up). This quality company is growing profits in the double digits with a P/E of just 14. AMGN ranks 9th in the Conservative Growth Portfolio Power Rankings. |
Power Rankings |
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