Although he typically focuses on longer-term buy-and-hold positions, John McCamant has issued a trading buy for Amgen (NASDAQ: AMGN). He explains, "The stock has sold off so heavily, we now believe it is an attractive, shorter-term buy.
The editor of The Medical Technology Stock Letter explains, "When we see fire sales in the shares of individual biotech stocks, our interest always perks up. When it involves a company which just happens to have been a biotech bellweather for over two decades, we become significantly more intrigued."
He continues, "Amgen recently traded down to over four-year lows in response to a barrage of negative news flow. The investment community has punished the stock price, primarily because their Epogen franchise is under pressure from both competitors and government payers."
The stock, McCamant notes, is now trading at a 13x multiple on 2007 estimates, which he says is "quite cheap for a Big Bio, even one that has run into a slew of problems." Thus, he contends, "Our contrarian stance leads us to believe that Amgen's stock has bottomed out."
For traders, he suggests, "We believe the stock price is due for roughly a 10% bounce (at least) as we head into the fall investment season-one which historically has been favorable for the biotech sector, as news flow picks up significantly after the summer slowdown."
He also expect Amgen to announce positive results from Phase 3 testing of denosumab in post-menopausal osteoporosis patients, which he suggests will help show Wall Street that they still have a few "promising nuggets in their bag." Overall, the advisor considers Amgen a trading buy below $51 with a short-term, six-month target of a minimum of $55-$56.
Each day, Steven Halpern's TheStockAdvisors.com features the latest investment ideas and market commentary from the financial newsletter community.
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Reader Comments (Page 1 of 1)
9-04-2007 @ 7:47PM
Don Harris said...
McCamant has been negative about Amgen since the late 80s when I first started buying Amgen. He pushed Xoma and other losers. He always claimed Amgen had nothing in the pipeline.
I'm kind of leery about him supporting Amgen!