Celgene Corp (CELG)

Gilead Sciences (GILD-Q) or Celgene (CELG-Q)? From an earnings forecast revision standpoint, Gilead is going up while Celgene is going down, so if you had to pick between the 2 on an earnings revision basis, you definitely have more tailwind with Gilead. They both have good pipelines, both good companies.

His outlook over the next year is very positive. It is sitting at reasonable multiples now. There are real prospects for it to diversify away from and become more than a one-drug company. There is a chance for dividend increases and a share buyback. This space has been really hit hard, and it is hard to see that being sustained. Looks extremely attractive at this valuation level.

This is a giant pharmaceutical name, mainly in the cancer and other severe immune inflammatory condition therapies. They contain a very strong growth prospect that will benefit from aging demographics. Their therapy pipeline is extremely robust. There has been a lot of concern that 60% of their revenues comes from one drug, but that is going to be diversified as more drugs come online. They have made some acquisitions in the past. Trading at 23X forward earnings with a 25% long-term growth rate.

They have 17 consecutive years of record revenues. Fighting blood born cancers. It is a targeted approach. He expects over 20% growth next year. It had a pull back so he is buying it.

Trading at about 40X earnings. They have a couple of very good drugs, but have front ended drugs, with one drug representing about 65% of their total revenue.

A lot of large biotech names have been kind of flat lining lately. The biotech sector has taken off quite a bit, and there are some rumblings that it is a bubbling area or expensive. He would disagree with that. They are rather cheap in terms of their PE relative to their growth ratios. He likes these areas. The long-term growth expectations are still very strong.

This is involved in cancer drugs. He has taken a very small position in this name because in the biotechnology sector there is a risk of approvals. Be cautious if going into this one.

Celgene (CELG-Q) or Gilead Sciences (GILD-Q)? If he had to choose one, it would be Gilead because it trades at a better valuation. Not that Celgene is trading at a bad valuation, trading at a .86 PEG ratio versus .5 for Gilead. He likes both names.

Large cap biotechs are unfairly mispriced. 0.8 Peg ratio so it is cheaper than 95% of the S&P right now. You have to hang on for the ride.

Bio tech stocks were beaten up. Buying some. Thinks they will continue to have the growth. Use stop losses.

Likes this although he sold his holdings for profits 2 months ago. Still lots of room to go on this. They are more involved in the cancer type of area. (See Top Picks.)

(A Top Pick April 19/12. Up 45.33%.) Cancer drug producer. Sold his holdings at about $100 last month. Still likes but would wait for it to come down a bit before buying. Great long-term growth at 20%-25%. Trades at about 20X PE.