Biotech Values

The same old biotech earnings news… Companies blow out earnings and the market gives them a big yawn. Last week Genzyme (Ticker: GENZ) posted very good earnings and projected earnings per share will grow at least 20% for the next five years. This company is trading 18 times next year’s earnings. Can it get any cheaper than this? Oh, the company also initiated a $1.5 billion share buy back. I would back up the truck if I didn’t have such a big position in this stock.

Another company I like is Celgene (Ticker: CELG), which also posted very good earnings last week. This is a high flyer, but it’s still cheap based on its projected earnings growth rate. It’s currently trading at 37 times next year’s earnings, but is growing earnings per share at 50%+. This one is also a keeper.

The earnings season is almost over, this week I have to keep an eye on MasterCard (Ticker: MA) and Invitrogen (Ticker: IVGN). I’m looking for blow out earnings from MasterCard and a nice beat from Invitrogen. Overall, this was a very strong Q2 and I expect the market to march up on this wall of worry. A little fear is good for the market.

Updating From Abroad

I'm on vacation in Europe, but I can't help but notice the strength in Qiagen (Ticker: QGEN). The stock hit a multi year high today of $18.43 and I see more to come. The company is in the process of acquiring Digene (Ticker: DIGE), which is using molecular diagnostics for the detection of HPV. The strength in Qiagen is surprising since the stock price of the acquiring company will often decline, but not in this case with this stock. This merger is a big plus for Qiagen and the market sees this. Hold on to Qiagen tight, we're just in the early innings of a big move. I'm adding on any dips.