Genzyme: A stock base is now in place

Posted Jun 19th 2009 5:40PM by Joseph Lazzaro
Filed under: Stocks to Buy

A Buy has been issued in these circles for biotech company Genzyme Corp. (Nasdaq: GENZ). The Buy rating would have been generated earlier, but technical indicators and the stock's dip below the $50 price level necessitated the delay.

Further, a Genzyme conference call this week to discuss manufacturing problems at its Allston facility has addressed concerns enough such that it appears the FY2009 earnings picture will not be hurt. The First Call FY2009/FY2010 EPS estimates for GENZ are $3.28 to $4.54.

It's now appropriate to view the stock as having good support at $50: a base is now in place. A sustained drop below $40 could refute that argument, but that's not expected, hence the Buy.

Stock Analysis: Genzyme is a moderate-risk stock. Consider buying a 25% position in GENZ now; then buy another 25% in four months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your GENZ position before October 2009. Sell/Stop Loss if you were to buy shares in this company: $37.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.

Tags: GENZ, Genzyme