Monday, July 30, 2007

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.


At August 07, 2007, Blogger eattherich said...

You should check out Cramer's CELG analysis here


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