Wednesday, January 10, 2007

Genentech = $$$ in DNA

Genentech (Ticker: DNA) delivered great results once again. They generated Q4 sales of $2.7 billion and earnings per share of $0.61, which easily beat analyst estimates. The company also raised guidance for 07. As I look through the earnings report, I can’t find anything I don’t like. It was a very strong quarter. I’m sure there will be some analyst nick picking some parts of the earnings report. All I can say is that this company is cheap, cheap, cheap! Trading at a forward 30 P/E multiple!? Come on…

Have you checked out the other big cap biotechs? So far lots of positive news. Genzyme (Ticker: GENZ) reported strong preliminary Q4 sales numbers and guided up for 07. Celgene (Ticker: CELG) also delivered strong Q4 numbers, but toned it down a bit for 07. Celgene’s sell off yesterday was a big mistake. I would buy Celgene on any pullback. The big cap biotechs are setting themselves up for a strong year.


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