It's still a good time to buy BMY

Posted Sep 23rd 2009 5:00PM by Joseph Lazzaro
Filed under: Bristol-Myers Squibb (BMY), Stocks to Buy

I'm reiterating my Buy rating for Bristol-Myers Squibb (NYSE: BMY), first recommended on June 1, 2009 at a price of $20.11.

The low, single-digit revenue growth story remains intact for Bristol-Myers Squibb in FY2009. Hence, place BMY in the category of a get-ahead-of-the-pack play.

Standout blood thinner Plavix should continue to shine, with market share gains likely. Also, look for impressive results from new products Orencia (for rheumatoid arthritis) and Sprycel (for leukemia); BMY's nutritional products also should register a good year.

Technically, BMY's stock straddled the 50-day moving average for two months this summer, a problematic pattern, following the $20.11 entry point, but has since broken above and uptrended in the past two months. Further, the $22-25 level will probably be the last entry point to earn an outsized gain.

The First Call FY2009/FY2010 EPS estimates for BMY are $2.01 to $2.18.

Stock Analysis: Bristol-Myers Squibb is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in BMY now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your BMY position before December 2009. Sell/Stop Loss if you were to buy shares in this company: $12.

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

Tags: bristol myers squibb, BristolMyersSquibb, orencia, plavix, sprycel

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Reader Comments (Page 1 of 1)

9-27-2009 @ 6:32PM

jeff said...

Really? Because as far as I can tell BMY doesn't move. 19-22 buck is its zone. So, maybe you mean good as in no risk no reward. Sort of like a bank savings account. Well, no thank you. I like the craps-table stocks.