Buzz Stock of the Day- Celgene (CELG)

One of two things will happen within the biotech sector over in the short-run:

“We’ll either see a lot of companies disappear after their funds run out, or we’ll see a wave of consolidation in biotech,” said Michael Becker, CEO of consulting firm MD Becker Partners.

Coming to the table with speculative science in today’s market, as IBD pointed out, is an exercise in futility for small biotech companies looking to borrow money, or go public.

If biotech investing is appealing to you, we suggest you look at two criteria for companies:

1. Companies with operating cash flow
2. Companies that are likely acquisition targets

Our Buzz Stock of the Day, Celegene Corp. (Nasdaq: CELG) meets both. The New Jersey-based company generates strong free cash flow, yielded returns of 19.6 percent in 2008, and is projecting future growth.
According to a recent Motley Fool article, more than 95 percent of the Web site’s community are bullish on the stock.

New data expected later this year to support front-line use of the company’s myeloma treatment drug, Revlimid could also result in a “modest” uptick in U.S. adoption of the drug, according to a Cowen and Co. survey.

Celgene Corp. has about $2.2 billion in cash, and has quarterly revenue growth (yoy) of 51.5 percent. The company has operating free cash flow (ttm) of $182.1 million, and out performed the S&P 500 over the last 12 months. Shares of Celgene trade about 18 percent above their 52-week low.

Tags: biotech, buzz stocks

This entry was posted on Monday, March 23rd, 2009 at 9:17 pm by admin and is filed under Health Care Stocks. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.