| Stock (Symbol) | Stock Price | |
Celgene (CELG) |
$120 |
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| Data is as of | Expected to Report | Sector |
February 6, 2015 |
Apr 22 – Apr 27 |
Healthcare |
| Sharek’s Take | ||
 Celgene’s management put out some exciting financial targets when it reported last earnings last month. It forecasted $7.50 in profits by 2017 and $12.50 in profits by 2020. A 25 P/E on both would net a stock price of $188 two years from now and $313 five years out. That would be a 57% gain for investors over two years and 161% for five years. What’s more exciting is this is a diversified drug company that’s actually executing on this plan. It’s not somy hyped-up CEO spouting off on how great his company is. Since the market has risen for 6 years, lots of stocks are high and gains are tougher to come by these days. CELG gives investors a perfect combination of certainty, consistency and rare growth opportunity and thus I will increase my position in the stock. |
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| One-Year Chart | ||
 I want to point out something here. Notice the pullback CELG made last Spring. The stock came down even though everything was fine. The morral to the story is sometimes stocks go down when they shouldn’t. CELG went from $85 to $120 and dropped 20% in between. |
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| Earnings Table | ||
 Profits jumped 33% last quarter on only a 19% gain in sales. Sales growth is set to accelerate to 23% next qtr, so profits.Unfortunately, the bump in sales growth might not translate in even better profit growth than what CELG just had as the company has beaten the street by just a penny in three of the last four qtrs.Annual Profit Estimates have been staying fairly consistent each qtr. Quarterly profit growth is expected to climb back past 30% later this year. There’s a change CELG’s P/E could reach 30. |
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| Fair Value | ||
 I think this stock should be selling for 30x earnings, and have a Fair Value of $145 for it this year and $190 for 2016. I’m liking Celgene more and more. |
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| Ten-Year Chart | ||
 One thing that doesn’t look good is this ten-year chart. Whew, the swift climb recently isn’t healthy, but a few years ago CELG’s P/E was only around 15 and should have been higher. So the stock had some catching up to do. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
2 of 24 |
This stock market is littered with large cap stocks which are overvalued and speculative stocks that might not make what we think they will. With Celgene we get a large stable company that’s also growing rapidly. I feel very safe putting more money to work here. |
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Aggressive Growth Portfolio
5 of 12 |
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