| Stock (Symbol) | Stock Price | |
Allergan (AGN) |
$99 |
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| Data is as of | Expected to Report | Sector |
June 3, 2013 |
Jul 31 |
Healthcare |
| Sharek’s Take | ||
 The data in this article is as of 6/3 when AGN was $99. Today, 6/25, AGN is $84.Allergan is a great franchise to own. This diversified pharmacutical company has grown profits 15% a year the last decade — without a down year — and expects mid-teens profit growth for the long term. This stunning display of consistency has earned AGN a median P/E of 25 during that spell. On a dip due to bad news, I will purchase AGN today for the Growth Portfolio. The problem with AGN is certainty. The shares hit al All-Time high of 116 this year and have dropped to around $85 because its key “billion dollar drug” RESTASIS (for dry eyes) could be available in generic within two years. RESTASIS is big, but Allergan does $6 billion in sales a year, and has a two billion dollar drug in Botox. Analysts at brokerage firms have downgraded the shares, and I’m thinking long-term, buying when they are selling, and collecting a franchise that could deliver us 15% stock growth per year. |
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| One-Year Chart | ||
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| Earnings Table | ||
 Allergan’s sales grew 5% last quarter and profits still rose 14%. 2013 sales are expected to climb 6%, 2014’s 9%.AGN beat by a little, but I don’t think this stat matters much with this stock Annual Profit Estimates came in around what they were last quarter. Today’s 2015 estimate is $5.99, down from $6.13 three weeks ago. Quarterly profit growth looks solid. Analysts have stated AGN doesn’t have any near-term catalysts to push the shares back up. |
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| Fair Value | ||
 It may take a bit for AGN to get back a 22 P/E, but I feel the stock will be be back over $100 by next year, and that would be around a 20% gain. |
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| Ten-Year Chart | ||
 AGN now has a P/E of 18. Only one year during the last decade has the stock had median P/E this low, than was in 2009 when it was 18. Yes, the stock probably doesn’t have momentum now but I like AGN as a collector. I’d hate to let the opportunity pass us by. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
13 of 19 |
Allergan is a key holding for investors looking to grow their money 15% per year. The stock is down on news that will likely lower profits in 2015 and beyond, but this gives us the opportunity to collect a franchise while its undervalued. AGN ranks 13th in the 19 stock Growth Portfolio Power Rankings. It will not be added to the Aggressive Growth Portfolio because it’s not a 20% grower and it’s not timely. |
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Aggressive Growth Portfolio
N/A |
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When this chart was done AGN was $99 and its P/E was 21, today the stock is $84 and the P/E is only 