All In: Biotech

What’s not to like about the biotech sector right now? The earnings have been very strong with Amgen, Genentech, Gilead, Celgene and Biogen Idec delivering strong results. Don’t forget about all the M&A activity. Genzyme is acquiring AnorMed, Gilead is buying Myogen and just today, Merck is taking out Sirna Therapeutics. You have a perfect scenario in the biotech sector. The supply of stock is dwindling with the M&A activity, a few stock buybacks and strong earnings from the big guys. I’m all in... I currently have positions in the following biotech companies: Amgen, Biogen Idec, Celgene, Genentech, Genzyme, Invitrogen, Qiagen and Vertex Pharmaceuticals.

Invitrogen Down, Down and Down...

Can Invitrogen (Ticker: IVGN) ever get it right? Yesterday, Invitrogen reported very disappointing earnings as their gross margins declined to 58% from 64% from last year. The Street certainly didn't like the numbers and the stock is down ~ 13%. I'm very tempted to pick up a little here as it retest it's 52 week low. The company is still buying back stock and is generating a positive cash flow. I currently have a position in Invitrogen.



Edit: Just finished listening into the conference call. What a crappy call! Q4 is not looking good and 2007 is a toss up. This is a good company with good products, but poor execution and bad management. I'm still looking at this as a 2007 recovery play.

Sold the Cubes

When you see the market rallying hard and not giving up any gains at the close; it’s a strong market. This morning I sold the NASDAQ 100 (Ticker: QQQQ) @ $42.56 generating another whopping gain of 0.02% and used the cash to purchase Celgene (Ticker: CELG) @ $48.47. Celgene just delivered an outstanding quarter. Here’s a chart of Celgene breaking out into new highs.

Go Amgen...

Very nice numbers after the close from Amgen (Ticker: AMGN). They beat the top / bottom line and also increased guidance for the year. Amgen is still cheap and these numbers will propel the stock higher. My favorite biotechs right now are Amgen and Genentech (Ticker: DNA). I also like Gilead (Ticker: GILD), but it's a bit pricey in terms of valuation. I would like a pull back before initiating a position in Gilead. The Amgen and Genentech charts look great!

Not Again!

Well I’m back from vacation and here I go once again… I just didn’t like the tone of the energy sector so I sold Devon Energy (Ticker: DVN) @ $66.95 generating a whopping return of 1.29%. Can you guess what I did with the proceeds from this sale? Yup, I purchased MasterCard International (Ticker: MA) AGAIN @ $70.93! MasterCard is just resting here after a nice run up and it looks like it wants to go up more. These trades were transacted in my Roth IRA account.

Take It Back!

Forget what I said in the last post about MasterCard International (Ticker: MA). Today, I sold MasterCard International @ $68.29 generating a net return of 19.61%. This was transacted in my Roth IRA account. I used the proceeds from this sale and backed up the truck in Genentech (Ticker: DNA) @ $83.88.

So you must be asking why did I make such an about face decision? It's simple; Visa is about to go public. That's going to be a huge IPO. If I had a choice between MasterCard International or Visa, I would go with VISA. Yeah, I'll be keeping a close eye on the Visa IPO.

MasterCard Downgrade???

After a big run up, Goldman Sachs and Citigroup downgraded MasterCard International (Ticker: MA). This stock has lots of momentum and the downgrades are just a minor set back before heading back to new highs. I'm definitely not a seller on this downgrade and would add to my position on a good pullback. One of my rules in investing is to never listen to the analysts.

A Little Diversification

Yesterday, I did a little reallocation of my portfolio. Since Genzyme (Ticker: GENZ) makes up a large % holding in my portfolio, I decided to diversify a bit by selling off a few shares. I sold Genzyme at $69.06, which generated a long-term gain of 73.97%. I used the proceeds from the Genzyme sale and purchased the following stocks: Goldman Sachs (Ticker: GS) @ $175.45, Genentech (Ticker: DNA) @ $83.28 and Vertex Pharmaceuticals (Ticker: VRTX) @ $36.90. I decided to take a little risk with Vertex by betting on positive clinical results and eventual FDA approval for their hepatitis C treatment.

Qiagen's Break Out

Take a look at the one and two-year charts of Qiagen (Ticker: QGEN). Looks good, huh? It’s breaking out into new highs. This is one of my favorite plays on the R&D reagent companies. I already have a pretty good position in this stock and I have no concerns with backing up the truck at this level. Qiagen’s going higher…

One-Year Chart:



Two-Year Chart: