Time to scoop up some shares of Celgene

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Pharmaceutical company Celgene Corp., beaten down by Wall Street for the better part of 10 months, is now a Buy in these circles. Here's why:

Analysts now expect FY2009 revenue to increase 15-18%, boosted by Revlimid and Vidaza sales. Further, pipeline candidates in psoriasis and small cell lung cancer are nearing late-stage study. The First Call FY2009/FY2010 EPS estimates for CELG are $2.04 to $2.65.

Celgene's (Nasdaq: CELG) industry-leading growth prospects are the key positive here, and with green shoots appearing in the U.S. and global economies, the recession-argument critique has less support. Institutional investors appear to have weighed-in along those lines, with shares putting in a bottom at about $35-36.

The qualifiers include slower-than-expected Revlimid sales growth, but that point is not enough to negate the Buy at these price levels.

Stock Analysis: Celgene Corp. is a moderate-risk stock. Consider buying a 25% position in CELG 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 CELG position before October 2009. Sell/Stop Loss if you were to buy shares in this company: $22.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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Last updated: February 10, 2010: 08:00 AM

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