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Amgen Inc. Message Board

  • PaperProfit1 PaperProfit1 Aug 16, 2002 2:33 PM Flag

    AMGN forming non-limiting triangle

    The upside potential has no limits.

    Get ready to buy/cover.

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    • Thanks.

    • Go to product site of amgen,then type in leptin in search box

    • I thought it was on site-ir people will give you the info-its true its quite low on their priority list-it had great promise when they bought it from rockefeller inst.axokine from regn seems more promising-amgen has 14% of regn.

    • Your unbridled optimissism seems way premature. For two full years, AMGN was too expensive, range bound, and punishing long termers. For six months, relentless selling pressure ultimately to 30, and now one month, fully priced at 48, you have not a concern in the world. Just exactly why do you see the next 2-1/2 years a total reversal from the previous 2-1/2?

      While I have a short position, I intend to rebuy my shares when I cover, sometime in the next 3-6 months. I am nowhere near smart enough to call the next bottom, but as a guess, I'm going to say 27. I don't see a return to range bound, although that may well prove to be what happens, and long termers would be foolish to ignore the perils of that type of a situation again.

      • 2 Replies to itzybitter
      • The retracement to the low 30's seemed quite unreasonable, and more a consequence of market fears than anything specific to AMGN. AMGN had gone from 53 to 69 just before the announcement that they were buying IMNX. The negativity brought about by the deal caused a drop of close to 60%. In fact, if you count from the all-time high of 81, this was EXACTLY 61.8%, the Fibonacci golden ratio. Given the historically high volumes and the absolutely fantastic earnings report and other news, one can see that AMGN has shown that the drop to the low 30's was totally unjustified. AMGN has historically kept a very high PE ratio, and although the market has suffered a dramatic loss, AMGN seem to be ahead of the game, making excelent numbers during economic hard times, and after a Tech bubble burst.

        The problem is that there are many bears that have not been able to make the transition to the new bull market, or bear market bounce, if you will. The skepticism is due to the fact that the Techs will not recover that easily, but AMGN is doing as well as ever, and it is now the leader, along with GE and PFE, among others.

        It's AMGN overextended? I don't think so. The potential energy had been building for months of upgrades and good news, eventhough the stock kept going down. Ironically, the IMNX deal turned out to be much better than originally thought, as the stock closed at around $16/share on the last day of trading. The original estimated price of the deal was in the low 30's.

        I AM concerned about the valuation. Considering that AMGN shares outstanding has grown 20%, the price at the peak of the pre-IMNX announcement, put AMGN at a market cap of 69 Billion, excluding IMNX, of course. Today's market cap is 60 Billion. But AMGN is committed to lowering the shares outstanding through significant buybacks. Now, remember that the profit markgins for AMGN are huge, and they could increase the buyback program with the cash generated. Let's not forget also that they promised earnings growth int he mid 20's (%), but that they actually grew 28% yoy the last cuarter. This implies that they were being conservative. Not to mention the facts that they are probably not considering the good news (bad for JNJ) regarding Procrit and Eprex.

        I have every reason to be optimistic on the fundamental side, but I also see that the TA is particularly attractive. I am a follower and user of the Elliott wave theory, and I can tell you that AMGN just finished a mayor historical correction, and that the huge volume and strong bounce that resulted suggests that the bull wave now underway will be of a magnitude that is even bigger than what we have seen for AMGN in the past. Short-term, my target for AMGN is between $55 and $70. Enjoy!

      • In answer to your question:
        "Just exactly why do you see the next 2-1/2 years a total reversal from the previous 2-1/2?"
        2-1/2 years ago Amgen had two products, both well into their patent life. Today we have Aranesp, Neulasta and Kineret. The acquisition of Immunex has added Enbrel and other products.
        The past year has seen numerous FDA approvals granted for Aranesp including its use for treating anaemia associated with chemotherapy. Together with medicare reimbursements favoring Aranesp over Procrit, it all adds up to GROWTH!! Conservatively 20% annual growth and, quite likely, higher.
        That is the reason for the reversal. Anyone who invests longterm in Amgen already knows these facts.

 
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