Friday, January 19, 2007

Celgene Out & DNA In

I sold Celgene (Ticker: CELG) today at $55.06 generating a net profit of 13.09% (purchased on 10/26/06 at $48.58). This is a great company with great growth, but it’s just too pricey for me right now. It’s trading at 14X next year sales and any disappointment; it’s over. Their recent guidance for 07 was a bit disappointing and the shares sold off. At that time, I didn’t think it was a big deal and thought the stock would recover, but the chart doesn’t look so hot right now. If you take a look at the weekly chart, it wants to head back down to its 50 day moving average. So I used to proceeds from the Celgene sale and purchased more Genentech (Ticker: DNA) at $88.99. I think this is the year for the big cap biotechs and Genentech should lead the charge.

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