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The Zacks Analyst Blog Highlights: Amgen, Celladon, Kite Pharma, Pharmacyclics and Vertex Pharmaceuticals - Press Releases

For Immediate Release
 
Chicago, IL – April 30, 2015 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Amgen Inc. (AMGN), Celladon Corp. (CLDN), Kite Pharma (KITE), Pharmacyclics, Inc. (PCYC) and Vertex Pharmaceuticals Inc. (VRTX).
           
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Wednesday’s Analyst Blog:    
                

3 Stable Large-Cap Biotech Stocks to Buy Now
 
The biotech sector suffered a setback earlier this week with the NASDAQ Biotechnology Index slipping 4.1% on Apr 27. The sector was negatively impacted by disappointing developments for companies like Amgen Inc. (AMGN) and Celladon Corp. (CLDN).

While biotech major Amgen is going through a rough patch with the FDA raising concerns about the company’s investigational skin cancer candidate, talimogene laherparepvec, in its briefing documents ahead of an FDA advisory panel meeting, Celladon’s shares crumbled on the news that its phase IIb study (CUPID2) on advanced heart failure patients failed to meet both primary and secondary endpoints.

On Apr 27, Amgen’s shares fell 3.3% with the share price remaining almost flat in the subsequent trading session. On the same day, Celladon’s shares nosedived 80.7% followed by a meager increase (3.4%) in the subsequent trading session. (Read more: 5 Biotech Stocks to Avoid After Monday's Slump)

However, the biotech sector has not lost its luster yet. In spite of occasional slumps, the NASDAQ Biotechnology Index shows an uptrend in its year-to-date value. This is driven by dynamic changes in the biotech sector brought about by several big players through collaborations, mergers & acquisitions, product approvals and encouraging pipeline updates.

The sector started 2015 with the announcement of several deals and the momentum has been continuing ever since. With Kite Pharma (KITE) and Amgen leading the way with a deal inked in Jan 2015 for the development and commercialization of the next generation of chimeric antigen receptor (CAR) T cell immunotherapies, another major acquisition was announced in April – AbbVie announced its intention to acquire Pharmacyclics, Inc. (PCYC), with the deal slated to close in the second quarter of 2015.

Volatility in the biotech sector is expected to continue with several companies yet to announce first-quarter 2015 earnings. In this scenario, it would be a good idea to zero in on a handful of large-cap biotech stocks that involve comparatively lesser risk and higher dividend yield. Large-cap stocks are generally mature with cash-flow generating products and pipeline candidates in advanced stages of development. Such companies, although perceived to be slow-growing, tend to have solid balance sheets and exceptionally large amounts of cash.

How to Pick?

Picking the correct growth stocks from so many options could be a daunting task. However, with the assistance of our new style score system, one can locate stocks that have a solid growth potential.

Our Growth Style Score condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth. Our research shows that stocks with Growth Style Scores of ‘A’ or ‘B’ when combined with a Zacks Rank #1 (Strong Buy) or #2 (Buy) offer the best investment opportunities in the growth investing space.

For finding the best growth picks, we first short-listed biotech stocks that have a Zacks Rank #1 or #2 as well as a Growth Style Score of ‘A’ or ‘B.’ Finally, we zeroed in on three stocks that have market capitalizations of greater than $10 billion and beta less than 1. These stocks offer perfect opportunity to investors looking for secure investment options.

Amgen, carrying a Zacks Rank #2 (Buy) is a great pick for biotech investors. This California-based company posted encouraging first-quarter 2015 results with earnings of $2.48 per share soaring above the Zacks Consensus Estimate of $2.07 and exceeding the year-ago earnings of $1.87.

The company’s performance was supported by strong sales of products like Enbrel, Epogen, Sensipar, Prolia and Xgeva. The company raised its earnings guidance to the range of $9.35 – $9.65 per share (previous earnings guidance: $9.05 – $9.40 per share). Moreover, the company has several important regulatory decisions pending this year. Positive outcomes from these should further boost the stock.

Vertex Pharmaceuticals Inc. (VRTX) is another Zacks Rank #2 stock. This Massachusetts-based company has been seeing favorable estimate revision activity of late. Analysts raising estimates right before earnings is a pretty good indicator of a favorable trend.

The Earnings Surprise Prediction, or Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +17.33%. Combined with a Zacks Rank #2, the positive earnings ESP is a leading indicator of a probable positive earnings surprise for the company this season. The company is scheduled to report first-quarter 2015 results on Apr 29 after the market closes.

Conclusion

Despite challenges like increasing competition, pricing pressure and the prospect of biosimilars in the U.S., we believe that key fundamentals in the biotech space are still intact. In this case, selection of stable large-cap stocks with the help of Zacks Rank and Zacks style score system can help one find the best stocks for their portfolio and earn impressive returns.
                                                                                                          
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

About Zacks Equity Research           

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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AMGEN INC (AMGN): Free Stock Analysis Report
 
CELLADON CORP (CLDN): Free Stock Analysis Report
 
KITE PHARMA INC (KITE): Free Stock Analysis Report
 
PHARMACYCLICS (PCYC): Free Stock Analysis Report
 
VERTEX PHARM (VRTX): Free Stock Analysis Report
 
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