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Paul MacDonald Celgene Corp CELG-Q TOP PICK Dec 03, 2018

They're in oncology, particularly blood cancer. They've had some headwinds in some FDA submissions due to mistakes by management. So, the stock got punished. It's trading at 6.5x and generating a ton of cash flow as good test results come in. They are diversifying as they acquire. Hoeps investor sentiment improves. (Analysts’ price target is $108.61)

Paul MacDonald

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$73.420

Stock price when the opinion was issued

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SELL

Having issues in terms of competition. They wanted to merge with Bristol. She doesn't think the combination makes it a better company. She would sell on the announcement (as the stock lifted).

PAST TOP PICK

(A Top Pick Mar 20/18, Down 0.2%) It was one of his hopes in the medical area for great growth. They are being acquired. He is going to keep holding it.

PAST TOP PICK

(A Top Pick May 30/18, Up 22%) They have a lot of new products in their patent portfolio. They are being acquired. It would be a nice speculative holding in the marketplace when it closes.

BUY

Bistol-Myers bought it which is good news for Celgene holders.

PAST TOP PICK

(A Top Pick Mar 21/18, Up 10%) Sold it because it's getting taken out by Bristol Myers.

DON'T BUY

Heading into the election cycle, pharma will be under pressure. He prefers being into medical devices. He has a hard time being excited about either CELG or BMY, especially if the market is currently jittery. (Analysts’ price target is $100.33)

COMMENT

He started buying BMY-N ahead of the merger discussions with CELG-Q. If the merger fails, holding the buyer is safer as arbitragers unwind hedges. The combined company would be a good cash flow generator, which would help internal growth and debt pay down.

PAST TOP PICK

(A Top Pick Oct 22/18, Up 25%) The Bristol acquisition was perfect. CELG boasts strong competitive barriers to their products and their product pipeline will pleasantly surprise the market. He's not worried about the US election and the negative effect on US healthcare; in fact, he loves buying stocks when others fear or hate them.

SELL

He sold out because it's going to be merged with Bristol Myers, they received full value, and there's always deal risk. Celgene owners may get a premium if 3 drugs come to market and exceeded certain thresholds. This is a side bet, and not the way he likes to invest.

PAST TOP PICK

(A Top Pick Dec 03/18, Up 47%) Celgene had made a number of mis-steps, including management applying for multiple FDA approvals. One thing he really liked about the acquisition was the price it was bought. The acquisition by BMY helped them diversify and it seems to be going well.

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Paul MacDonald Celgene Corp CELG-Q TOP PICK Dec 03, 2018

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