| Stock (Symbol) | Stock Price | |
Celgene (CELG) |
$147 |
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| Data is as of | Expected to Report | Sector |
May 12, 2014 |
Jul 21 – Jul 25 |
Healthcare |
| Sharek’s Take | ||
 Celgene hasn’t been doing much in 2014. The stock is down from $169 to $147 year-to-date, taking a break after a $78 to $169 run last year. But Celgene is a sleeping giant with a a deep pipeline of new drugs coming that could push profits to $15 a share in 2-3 years. So at $147 the stock’s selling for around 10 times those earnings. CELG has 20 P/E on 2014 earnings, as profits are growing around 20% a qtr right now. But profit growth is set to accelerate to 30% during the 2nd half of the year, and that’s when I feel this stock will wake and roar. |
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| One-Year Chart | ||
 I like the Estimated Long Term Growth Rate of 26%, but I really appreciate more on a dependable healthcare stock like this. If profits can grow 26% a year for three years they essentially double. That gets us to $15 in profits, and a 20 P/E would be a $300 stock. Easy money. |
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| Earnings Table | ||
 Sales growth was a respectable 18% last quarter and the company got a 21% boost in profits.CELG beat the street by 2 cents last qtr, after missing by 2 cents a 2QtrsAgo. Annual Profit Estimates ticked higher. Note the company is on pace to make $10 next year and the stock’s only around $150. Quarterly profit growth is expected to accelerate to the 30% range later in the year. I think I’ll buy more shares as the year-end approaches. |
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| Fair Value | ||
 There’s been times when this stock’s been undervalued for no reason. In 2010 and 2011 the median P/E was only 14-15 even though profit growth was solid. Strange. Now I think the stock’s corrected because the NASDAQ Biotech index jumped 55% last year and needed a rest. |
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| Ten-Year Chart | ||
 The Yearly Profit Growth is much higher than the Yearly Stock Growth, and tells me the stock has some catching up to do. But CELG really needed a break after the parabolic run last year. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
9 of 25 |
Celgene is a sleeping giant. When it awakes — which I think will be later this year — the stock could go on a run like it did last year. CELG is the perfect combination of certainty, consistency and growth opportunity. |
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Aggressive Growth Portfolio
N/A |
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