Stock (Symbol) |
Amgen (AMGN) |
Stock Price |
$148 |
Sector |
| Healthcare |
Data is as of |
| February 29, 2016 |
Expected to Report |
| Apr 19 – Apr 25 |
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) continues to crush earning estimates as management underpromises then overdelivers. The company has beaten analyst earnings estimates handily in each of the last 7 qtrs. Last qtr it beat the $2.30 estimate by 31 cents, the 3rd beat by at least 30 cents in the last 4 qtrs as management cuts internal costs and buys back stock. AMGN is the daddy of biotech stocks, having gone from $1 to $150 since 1990. Today Amgen has multiple blockbusters on the market, and a robust pipeline with 10 new drugs expected by 2019. One new drug is a cholesterol-cutting injection Repatha which was approved in the U.S. last August. Testing has shown Repatha to be slightly superior to a similar drug produced by Regeneron. Regeneron is a new biotech company, and to me this shows this wily old veteran hasn’t lost a step. Amgen carries a top safety rating and an estimated long-term growth rate of 8% in addition to a 3% yield, for an estimated total return of 11% per year. In 2011 it became the first biotech to start issuing dividends and has increased the dividend each year since — from $0.56 to $3.16 in just 4 years. The stock is reasonable at 14x earnings and has double-digit upside to my Fair Value. |
One Year Chart |
 AMGN grew profits a robust 21% last qtr on just 4% an increase in sales. The company is focused on being efficient internally (including cutting jobs) and buying back shares on the open market. Looking ahead, analysts predict just 4%, 6% and 5% profit growth the next 4 qtrs, but AMGN has been beating the street by a lot lately. The Est LTG just fell 2% from 10% to 8%. |
Fair Value |
 2015 was the 7th straight year for record earnings at Amgen. I just reduced my Fair Value on AMGN from 16x earnings to 15x. The stock currently has 10% upside to my 2016 Fair Value and investors collect a dividend to boot. The 2017 Fair Value makes the stock look even better. |
Bottom Line |
 Amgen is one of the all-time great stock market winners and continues to provide consistent growth to this day. The stock is down off its highs, but a lot of that can be blamed on a weak biotech sector and poor stock market in general. This safe stock is a good choice for conservative accounts. AMGN ranks 27th of 36 stocks in the Conservative Growth Portfolio Power Rankings. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio 27 of 36 |
