| Stock (Symbol) | Stock Price | |
Allergan (AGN) |
$129 |
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| Data is as of | Expected to Report | Sector |
February 28, 2014 |
Apr 28 – May 2 |
Healthcare |
| Sharek’s Take | ||
 Allergan’s RESTASIS drug won’t lose its patent protection in 2015, but instead keep it until 2014. The risk of losing RESTASIS protection caused AGN to fall last year, and I picked up the stock at $84 in June because it’s a solid core stock you buy on dips. Allergan grows profits around 13%-15% a year, but since it has delivered record profits each year, its consistency is high. When there’s not patent fears the stock sells for 22 times earnings, because of the high certainty that AGN will deliver in the future. When I bought AGN last June, certainty was low and that brought the stock down until the P/E was 18. But now that the patent fear is gone, the stock is up and the P/E is 24 — making the stock slightly overvalued right now. |
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| One-Year Chart | ||
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| Earnings Table | ||
 Sales rose 12% last quarter and profits increased 17%. Allergan usually grows profits at a faster rate than sales (as most good companies do).The company beat the street by a penny, which isn’t news. 2015 annual profit estimates got a big boost from the RESTASIS news. Quarterly estimates show normal Allergan growth of around 13% per quarter. |
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| Fair Value | ||
 This stock was $91 last quarter and had upside of 31% to 2014’s Fair Value of $119. Now the stock’s $129 and is overvalued by 6%. |
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| Ten-Year Chart | ||
 Love the ten-year chart, for conservative investors that is. I just don’t like the Yearly Stock Growth of 11% per year. Combine that with the fact the stock’s $129 and is worth $120 and I am now inclined to sell AGN. I’m a growth stock guy who likes 20% growers. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
N/A |
Allergan is a great conservative stock to own. If I was retired it would be a key holding. But if I didn’t own the stock today, I wouldn’t buy it. My calculations show it should make 6% in a year. I can use the cash for younger faster-growing companies. Tomorrow I will sell Allergan from the Growth Portfolio. I’m thankful for the gains and will look to buy back in when the stock goes back on sale. |
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hAggressive Growth Portfolio
N/A |
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I’m surprised the stock’s recovered so quickly. As you can see the P/E is now 24 and AGN’s a little high. Profit growth along the bottom is par for the course with Allergan. This is a good conservative stock to buy-and-hold but wait for a better time to get in.