Celgene Corp (CELG)

We are in a much more favourable regulatory environment, and feels this company is a wonderful entry. This is a bio pharma, as opposed to a chemical pharma. Unlike past years where they traded at a 2X and 3X multiple, they are now trading at or below the multiples of the traditional pharmas. Also, growth metrics are much, much better and much more exciting. Feels this has a long way to go. (Analysts’ price target is $139.08.)

This is a beneficiary of the mandate coming from the Trump administration. With the Hillary Clinton overhang being out of the way, he likes this. This continues to have very, very strong growth prospects and will benefit from aging demographics. This is more in the cancer drug type of space and have a good pipeline of drugs that are coming through. They have a growth plan to double their revenues to more than $21 billion by 2020. Trading at 18X forward earnings with a long-term growth rate of 20%. (Analysts’ price target is $139.)

A biotech company making drugs, predominantly for the cancer industry. About 20% growth per annum over the next 5 years. Probably one of the largest biotech knowledge companies. Huge balance sheet. Extremely profitable. He doesn’t think doctors are going to stop prescribing drugs that save you from cancer, regardless of what the government does.

The top biotech company in the US. They have 18 drugs that are in phase 3. They have a drug revlimid that is for multiple myeloma and otezla for immune problems. Selling at about 18X earnings and thinks it will grow 20% per annum through the next several years. His target price is $150-$160 going out to-3 years.

(Top Pick Sep 14/15, Down 11.18%) The largest pharma company working on fighting blood borne cancers. They are growing top and bottom line about 20%, so they are attractive. The sentiment for the health care sector has been negative through this election campaign. Buy on a pullback.

A biotechnology company that is primarily focused on cancer research. They take positions in companies, watch them do the R&D, and then they capitalize further. They’ve made 2 acquisitions, one in the MS space. They have a based strip cancer drug and then little bolt on drugs that combine with the based for changes in chemotherapy treatments.

The business model is a little riskier but it is attractive on valuation.

Biotech was a leading group in the market until last October when comments started coming out around pricing and some of the ways mergers and acquisitions were being done. It really took M&A off the table for many companies who were looking at low tax jurisdictions to make acquisitions. The leading theme in health care right now is health care devices. If the market continues to get better, this sector is likely to start participating. He would prefer to see this break above its declining 150 day moving average and take out its recent high of $110.

They have a booming product line. Several drugs in the pipeline have promise. They like it a lot. It has come on because of ‘Hillary-Gate’. Hillary had a crack at the drugs in 1995/6 and failed, but it became an outstanding buying opportunity in this sector.

This has a hugely strong balance sheet. A highly innovative company. They do a lot of joint ventures with smaller companies, and when they start getting interesting, they can take them out. Have some very promising and effective drugs in the multiple melanoma and cancer space that work and are effective, and the drugs are being used longer. They are going to grow their earnings by about 35% this year and it is trading at 16X earnings. Own this for 4 years and you will make money.

Amgen (AMGN-Q), Celgene (CELG-Q) or Biogen (BIIB-Q)? These are 3 great companies. His preference would be Amgen, the leader in the space and the dominant player. This one is on his list right now and he is monitoring it. They have 1 drug which is about 60% of their revenue, but he likes what they have done in joint ventures in the past year.

Some of the biotech names, especially some of the larger cap names, represent some decent value for growth prospects they can give you. Trading below the 200 and 50 day moving averages right now, so not very strong from a technical perspective, but he does see a bottoming process. It hasn’t seen the February lows again. Touched down to it in March, but is now a little bit above those levels. He likes the stock.

Got beat up quite a bit last year. Long term, this name will continue to do well. They are into severe immune system problem drugs. 19 times earnings with 20% compound rate of return. It is breaking above resistance.

Healthcare did well until October of last year and then political rumblings affected it. The jury is still out. He likes healthcare as a space. He would prefer to wait to see establishment of leadership in the biotech space before buying.

The general market perception is weighing on companies like this. Then there is the political garbage that is weighing on them, and that is going to keep the stock under lid for a little bit, but it has a great growth story. Trading at a very, very reasonable valuation. Strong balance sheet. Of all the biotech stocks you would want to own, this is the one. Would love to see it get beaten up a little further, so he could add more.