Saturday, January 25, 2014

"A 3% correction in the market on Thursday and Friday brings an opportunity to add the top biotech company in the world, AMGEN, (AMGN), to your long term stock portfolio."

Dow Jones Industrial Average 15,879 (Down Big!) Week ending 01-24-2014

Well now, that was one ugly end of the week!
I guess it would not really be a market if stocks only went up and never went down. I would say here that if you have stocks with a good long term growth potential that I would stick with them, and hold them. They will be the stocks that come back after the storm blows over.

With that said, the flip side is that with these sell-offs in stocks comes an opportunity to add some quality names to your IRA and long term investments. One name that I identified on Friday is AMGEN, (Symbol AMGN, $119.31) which was down 4 points on Friday. 

AMGN gets overshadowed in the media by its glitzy brethren Celgene, Gilead, Biogen-IDEC and Regeneron.  But make no mistake, this company which is a little more mature and pays a 2.05% dividend, had a 1 year trailing twelve months stock value change of 44.38% and that is AFTER the sell off on Friday, so it had been up around a 50% total return last year.

Besides, you know that a company that sponsors a world class bicycle race is not going to come in last place!

AMGEN by the numbers: Revenues last year were $18 Billion. The PEG ratio is currently 1.423 and the Return on Equity is 24.05%. 
These numbers fit well with Freewilly's investment criteria for PEG and ROE.

AMGEN Helix Pedestrian Bridge
AMGEN operates at a Gross Margin of 83.40%. The quarterly year over year diluted earnings growth is 26.95%. As of last quarter, the company had $22.56 Billion dollars in Cash and Investments. 

AMGEN is projecting $7.47 per share in earnings for 2014 and $8.17 per share looking ahead to 2015 with a Current PE ratio of 18.85 and a future PE projected at a reasonable 15.20. Year over year Revenue growth is 9.93%.

AMGEN had purchased ONYX Pharmaceuticals back in August 2013 to add to their developing pipeline of medicines. AMGEN is currently the world's largest Biotechnology company. AMGEN employs 18,000 people.

AMGEN as a company has total assets of 57.07 Billion dollars. In the last 12 twelve months more INSIDERS have been buying than selling (66/65).

It is my opinion that this stock can get to a price of 136 by the end of the year, a 15% gain. Add that to a 2% dividend and that gives you a 17% Total Return. I think that will reflect as a good return number at the end of 2014 and with very little inflation.

So don't get shook out of your boots!  Be smart and be a stock picker this year. Make sure to mix in some those quality stocks that pay a dividend to go along with your mega-growth stocks.  You'll sleep better at night.

Let's see what happens this week, with lots of companies reporting in their earnings.

Best Regards,


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