Dow Jones Industrial Average 12,480 (Down) week ending 07-15-2011
7-19-2011 - Back to looking at good fundamentals this week. The markets gyrations both up and down have everyone in a twist about buying stocks that are not of the best quality. It looks like all boats are floating up. Don't fall into this trap. The summertime always seems to give an opportunity for buying some
good quality Pharma stocks at a reasonable price.
Amgen Inc. (Symbol AMGN, $55.27), with a
PE of 10.82 and
5 year earnings growth rate of 13.3% over the
last 5 years would be one of these quality stocks.
Amgen will have
2011 earnings of
$5.05 per share and
2012 earnings of
$5.49. The stock is actually
even for the last 12 months, so has not added any premium to reflect the improving added earnings. There is
no "hot" money in here right now, so you don't have to worry about a sharp sell off. I would buy the stock here.
Novartis (Symbol NVS, $62.17) is the second stock that I would like to mention. It pays a $2.00 dividend so you start out with a
$3.29 yield. The One year
Total Return on the stock is
28.9%. 2012 earnings are looking like
$5.76 per share. A little more aggressive purchase than
Amgen , but very solid choice.
PE on the stock is
11.08, so is very reasonable.
Gilead Sciences, Inc. (Symbol GILD, $41.70) is the third stock that looks good in the summertime. Again a palatable forward
PE of 10.85 , so no overpaying here.
2011 earnings of
$3.76 and
2012 earnings of
$4.
31 looks promising going forward.
Gilead has a fabulous
5 year revenue growth rate of
27%. They have some of the highest net profit margins in the industry at
a lofty 34.6 %. No dividend here, but a
12 month total return of
22.5% with not a lot of volatility.
GILD will make a nice building block for your portfolio.
 |
| Mokie relaxing in cap. |
So stay relaxed with all this market turmoil and
don't go chasing things like
gold or
speculating on stocks that have run up wildly.
Freewilly
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