| Stock (Symbol) | Stock Price | |
Biogen (BIIB) |
$394 |
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| Data is as of | Expected to Report | Sector |
February 4, 2015 |
Apr 21 – Apr 27 |
Healthcare |
| Sharek’s Take | ||
 Biogen (BIIB) popped after it reported earnings last quarter, and is now $40 higher than it was when I bought the stock for clients in late December. BIIB is timely now, but now that the stock has jumped it’s just 11% away from my 2015 Fair Value. This is a good stock in a solid sector (Biotech) but the real bonus is if Biogen’s new Alzheimer’s drug becomes a game-changer. Biogen did $10 billion in sales in 2014 and the market for an effective Alzheimer’s treatment is in the tens of billions of dollars. If the new drug works, the stock could compound in value as it did with its last blockbuster, Tecfidera, which was a catalyst that helped propel BIIB from $75 to $300. |
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| One-Year Chart | ||
 Profits have been so good during the last year, but BIIB rallied in anticipation of these profits. If you look at Estimates you can see profit growth is set to moderate 2QtrsOut when comparisons get tougher. The P/E of 23 is in black instead of green because the stock’s no longer selling at a big discount. |
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| Earnings Table | ||
 Last qtr, profits soared 75% on a 34% increase in revenue.
The company continues to beat the street, beating by 31 cents last qtr, 34 cents 2QrtrsAgo. |
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| Fair Value | ||
 As you can see from BIIB’s Profit History table, this stock usually peaks at around 23 times earnings, which is where it is now. I put my Fair Value at 26x profits because of the Alzheimer’s wild card. |
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| Ten-Year Chart | ||
 Nice looking ten-year chart but here you can clearly see that BIIB rallied during 2010 and 2011 before the latest blockbuster bolstered profits. Investors bought in early, before the blockbuster hit the shelves, which is what I just did. Still, BIIB has grown profits every year the past decade. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
7 of 25 |
Biogen gives us the best of both worlds in a Biotech stock. It has a long history of delivering stable profit growth each year and is also a speculative play on a potential blockbuster. The stock is timely and is increasing estimates, which is good, but profit growth is expected to slow 2qtrs out and that may stall momentum. |
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Aggressive Growth Portfolio
7 of 12 |
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