Wednesday, July 30, 2014

Biogen Idec long-term estimate; Amgen thoughts

I had not written about Biogen Idec (BIIB) since this article in April 2013, in which I concluded Biogen still had not completed its ascent:

Biogen Idec: Too High Too Fast?

But after listening (and taking notes on) the Biogen Idec Analyst Call Q2 2014 I decided it was worth another look. While I generally like to think of myself as a long-term investor, I will cut back or even dump a stock if I think it has become way overpriced.

Seeking Alpha accepted my article, so you can read it there (per our agreement):

Can Biogen Idec Take Wing with Tecfidera?

Meanwhile, Amgen had a good report yesterday; you can read my summary Amgen Q2 2014 results. I used to watch Amgen a few years back and thought it had sagging sales and was overpriced compared to the stocks I chose to invest in (GILD, BIIB, CELG), but last fall I took another look. Amgen by then had developed a vast pipeline and was trading at a very low P/E compared to competitors. So I bought in during the biotechnology panic this spring. There are still issues with Amgen's aging drug portfolio, but it looks like several new drugs will get approved soon and the pipeline is very, very deep.

Monday, July 28, 2014

This week: Amgen, Vertex, Akamai ...

It's another heavy week of earnings reports for me.

First, some links to some of my summaries of analyst conferences held last week:

Celgene (CELG) reported strong earnings growth of 17% y/y on July 24. I am bullish on Celgene, given its potential to expand Revlimid revenue and its pipeline, but it is not cheap right now on a trailing earnings basis.

Alexion Pharmaceuticals (ALXN) had earnings up 56% y/y. I like Alexion's model, but again a lot of future earnings growth is already built into the present price.

Agenus (AGEN) is a small-cap, development-stage company focussed on immunology, including Check Point Modulators (CPMs). In the quarter Agenus reported good Phase 2 trial results and is looking to partner with larger companies to further develop these therapies. They already have a deal with Merck to create new CPMs, and one with GSK for a component for a malaria vaccine. Watch this company.

Altera (ALTR) had a good quarter with revenue up 17% from year earlier. I believe that FPGAs (Field Programmable Gate Arrays) will continue to outgrow the overall semiconductor market, but put my money on rival Xilinx. Should have bet on Altera first; my intention was to buy both, and I still probably will.

The most interesting reports coming up this week (links are to pages where you can review past analyst conferences, if you like, and also linked to placeholder pages you can bookmark to get my summaries after the conferences take place):

Vertex Pharmaceuticals (VRTX), as follows know, is my least favorite Nasdaq 100 biotechnology stock to invest in, not because they aren't doing wonders in their therapeutic field, but because the stock price builds in way to much success compared to other companies. But maybe Vertex will return to profitability some time this year.

Amgen (AMGN) is well-established biotechnology company. I'll be watching revenue and earnings, as well as pipeline development. At some point Amgen may run into generic "biosimilar" competition for some of its therapies. There will probably be some analyst questions about that, and I would like to here the answers.

Akamai (AKAM) accelerates the Internet. Again, a great company, but I would need a lower price point to convince me to buy back in.

Microchip (MCHP) is a semiconductor stock with a reliable dividend and continuing growth potential. It is a core of my portfolio, but I would not call it cheap at today's price.

I own CELG, AGEN, AMGN and MCHP, and reserve the right to sell them or buy more of any of them at any time.

I do not own ALXN, ALTR, AKAM, or VRTX, but reserve the right to buy them at any time, which would be highly dependent on pricing.

I am an investor, researcher and financial writer. The above express my opinion, and does not constitute financial advise.

Thursday, July 24, 2014

Inovio, Biogen Idec, and Gilead Sciences

Inovio got some good data, and you can read my interpretation at Seeking Alpha:

Is Inovio Undervalues after Positive HPV Therapy Results?

I've been listening to results conferences for the stocks I either own or would like to own. Two somewhat related, at least being biotechnology stocks with disease therapies, are:

Gilead Sciences (GILD) Q2 analyst conference

Gilead had outstanding results, largely based on Sovaldi, a cure for Hepatitis C. I believe Gilead should be heading to $180 or so a share. I'm not sure whose selling at $90, maybe people who bought way back when at $5 and have to reallocate, but probably people with some hope that some other drug will knock out Sovaldi, a hope that will be crushed as we move through the quarters. Gilead is generating so much cash it can use for buy backs, fighting that tide is the height of folly.

Biogen Idec (BIIB) Q2 analyst conference

Biogen has been performing great and raised guidance. In this case the stock did go up substantially following the report. It is not a cheap stock, but if you look down the road, it is highly likely to keep up a rapid pace of profit growth for years to come.

Tuesday, July 22, 2014

Earnings Tuesday, Wednesday: ISRG, XLNX, BIIB, GILD, ILMN

For the stocks I follow this is a big week of earnings reports. Last week I just had AMD and Seagate (STX) report, and both disappointed by being at average public estimates of analysts.

Intuitive Surgical is first up, holding its analyst conference at 1:30 today. ISRG has been having trouble keeping up the prior pace of its surgical robot sales. But a miss today followed by a stock plunge would present a buying opportunity. ISRG used to have a sky-high P/E, but now it is reasonable, and in the long run I believe surgical robots remain promising.

Xilinx (XLNX) will report at 2:00 PM. Xilinx occupies an obscure but important part of the semiconductor industry. It will be interesting to see how demand was in Q2.

Tomorrow I will be covering Biogen Idec (BIIB) early in the morning. BIIB has been a big winner for me over the last decade. I have no particular expectations for tomorrow, but I will look for anything that might change my long-term model.

Gilead (GILD) is probably the most-followed stock that will report tomorrow, at 1:30 PM. Everyone wants to know how much Sovaldi was sold in the quarter. But watch the HIV, heart and cancer franchises too. I remain very bullish on Gilead in the long run, however any individual quarter sorts out.

And last on my list is Illumina (ILMN), the maker of DNA analysis machines. Again, it will be interesting to see how the quarter went, but that should not have much effect on the long run.

You can read my analyst conference summaries and find links to my articles at Seeking Alpha at the page listing the companies I cover at OpenIcon. Links above go the my pages for the individual companies.

Disclosure: at the time this article was written I owned AMD, XLNX, BIIB, and GILD stock. I did not own the other stocks mentioned, but I am always looking at a good price point to by stocks, and reserve the right to buy them at any time. I am an investor, financial researcher and writer, not a financial advisor, so nothing in this article should be construed as advice or anything other than an opinion.

Friday, July 18, 2014

I Exit Seagate (STX); stick with AMD

Just to note that I have sold my stock in Seagate (STX). I have not decided whether to continue coverage or not. While I think of myself as a long-term investor, I am looking to beat market indexes. Seagate was priced ridiculously low in 2012, for reasons I have explained in prior posts.

I believe Seagate has now become a dividend stock. It pays a good dividend, it has good cash flow, and it has a strong stock buy-back program. However, there are other stocks I think have better growth prospects that are not fully priced in.

I bought STX for $23.13 on 6/12/2012. I sold it in halves at $59.07 on 7/8/2014 and $59.82 on 7/18/2014.

I did my usual write-up of the June quarter (fiscal Q4) Seagate results and analyst conference.

In contrast, while I did sell 1/5 of my AMD on 7/16/2014 for $4.72 per share. I thought there was enough enthusiasm about AMD to cause almost any Q1 results to disappoint. But I still hold considerable AMD (as a % of my portfolio) because I believe it is making progress with its turn around. I believe AMD is a 2015 story, when it will start selling its new server chips, chips for gaming consoles in China, and the promised 1 or 2 major new customized SoC chips for confidential clients. For more see my AMD Q1 2014 results conference.

Of course I would be open to buying more AMD or STX if the prices fell low enough and my current expectations were unchanged.

Tuesday, July 15, 2014

Janet Yellen, Stock Picker; I buy more Protalix

Apparently Janet Yellen believes she can pick stocks. Or at least tell people to dump their "smaller" social Internet stocks and biotechnology companies.

So there was a sale today as the ever gullible dumped stocks they picked up when some other idiot told them to buy them in the past.

I am okay with my portfolio right now, particularly my healthcare and biotechnology stocks. I believe some of my companies like Gilead, Amgen, Biogen and Celgene will report increased earnings during the remainder of 2014 and beyond, so I don't ponder their daily volatility much.

I have a number of smaller positions in riskier companies that need good Phase III clinical results and then FDA approval to get their wares to market. I was tempted to buy more today, but ever-cautious, I only picked up one:

Protalix Biotherapeutics (PLX). I doubled my tiny amount of PLX, raising it to just above 1% of my portfolio.

One of my main criteria for picking up small, risky biotechs is that market capitalization indicates that success is not priced in, at least not too much.

If you want, you are welcome to look at my portfolio positions. In most cases there are links to my coverage (analyst conference summaries and articles) of the stocks. My list is not a set of recommendations, I am just being transparent because I am a financial writer.

P.S. Janet Yellen and I have one thing in common: we both have undergraduate degrees from Brown University. Mine was in Political Science. I took two economics courses at Brown, microeconomics and macroeconomics. I started studying the Federal Reserve then, and even then I knew that some of what I was being fed was bullshit.

Wednesday, July 2, 2014

AMD, what to look for

Another post published at Seeking Alpha:

3 More Reasons to Stay Long AMD

This would not be the best article for someone who knows nothing about Advanced Micro Devices. But so much has been written about AMD. There have been rumors of an inventory issue (too much of it) with high-end GPU cards. That is supposed to be the result of the end of the Bitcoin mania. So now gamers can actually buy high-end AMD GPU cards at reasonable prices. If there is some excess inventory, it will work out of the system quickly. The only real problem would be if people just plain stop buying high-end graphics cards, which does not seem likely.

There is the PC unit decline (or not) issue, and the ancient market share, AMD vs. Intel issue.

And we are all waiting to see if there will really be a AMD chip in some new mass market device beyond PCs and gaming consoles.

Which will all come out when AMD reports Q2 results on July 17. As usual, I will read and listen to the presentation and put up my notes (at AMD analyst conference summaries). But if you are thinking of investing in AMD, you should listen yourself (the link will be at AMD calendar). Why give the professionals an edge?

Good luck. Keep in mind I am always looking for the long-run value; I don't try to predict stock prices in the short run.

I own AMD stock; I am a business writer, not an investment advisor.

Tuesday, July 1, 2014

Agenus Scores Victory Over Glioblastoma Multiforme (Brain Cancer)

Just to note that Agenus (AGEN) announced positive results in its Phase II trial for its Prophage vaccine treating glioblastoma multiforme, a form of brain cancer. The results are quite impressive. However, a larger, randomized Phase III trial will be needed to gain FDA approval, and that would take something like 3 years. Agenus is likely to partner with a larger company for the trial and commercialization of Prophage.

See the Agenus Prophage Results press release

I recently covered the broad range of therapies in the Agenus pipeline:

Agenus Platforms Provide Many Shots On Commercialization Goal May 13, 2014 at Seeking Alpha

Agenus stock closed at $3.22 yesterday and as I write has risen to $3.81, up 18%. That gives it a market capitalization of $237 million, which I think is still vastly undervalued given the pipeline.

I own Agenus stock, which I first acquired in October 2013, with my last purchase in April.