Celgene and Partners 2016 outlook

I finally got around to finishing an article on Celgene. My research confirmed my belief that Celgene should at least double by the end of 2020 ("should" means the most likely path, not certainty). Seeking Alpha was kind enough to publish it:

Celgene Catalysts for 2016

One interesting point that I did not belabor in the article is, in addition, investing in the companies Celgene is investing in or partnering with. This is a double-edged sword. Because the companies are much smaller and are development-stage companies, the potential return, if they are successful in getting FDA approvals for their therapies, are much larger than Celgene's. Against that weigh that they mostly already have significant market capitalizations, so they are valued as if there is some certainty of some degree of success. (Probability of approval, times potential earnings per year, times a potential P/E ratio, should equal market cap).

So Celgene is likely to rise at least gradually because of ramping sales of currently approved products, plus any pipeline approvals. But the partners could fall dramatically if their therapies fail to show clinical results that warrant FDA approvals. And that could happen any time.

One of the main investment themes for me in 2015 was researching these Celgene partnerships and investing in a few of them. Because I was not in a hurry I was able to buy them during the Hillary Dip. Do your research and keep in mind the risks before buying at any price. But here are the ones I added to my portfolio:

Acceleron (XLRN)
Agios (AGIO)
Epizyme (EPZM)
Juno Therapeutics (JUNO)

To see all my biotechnology positions, with links to my notes on the stocks, try:

William Meyers Biotechnology Picks

This weekend I hope to write up an analysis of how my portfolio did in 2015. Right now it looks like about 16% to 17%, but I won't know exactly until the market closes. I'm going to submit my analysis to Seeking Alpha. If they don't publish it, I'll post it here.

Happy New Year!

William P. Meyers

Buying flurry: Dot Hill, Star Bulk, Ocata Therapeutics, Acceleron, Biogen

It is earnings season so I am very busy, so I am behind in updating followers on my trades.

If you want to read the notes I make on the analyst conferences of the stocks I follow, you can find a list of the stocks with links at: Meyers Analyst Conference List

I only sold once stock lately, a bit of my Celgene (CELG) stock, because I had bought some extra when it dipped and then it went back up and exceeded my portfolio limit rules. My last two trades were buying on April 30, 2015 at $107.20 and then selling the same amount on July 15, 2015 for $132.99. Of course Celgene has risen since then, so I am fairly near my portfolio limit of 10% of any stock for Celgene. Check out Seeking Alpha for my Celgene articles.

I also added shares of Dot Hill (HILL) to my existing holdings at $6.28 on June 26, 2015 and at $5.67 on July 7, 2015. Dot Hill continues to do well with sales of its data storage systems and so I would not be surprised at another record year and the stock heading to $8.

I bought some Star Bulk (SBLK) on July 16, 2015 for $2.99 because if the global economy revives a bit the demand for bulk shipping will too, and freight rates will hopefully come off their recent lows and reach levels that are profitable for shippers. It is off the beaten path for me and a risky investment because if rates stay low, it will continue to operate in the red.

On July 17, 2015 I bought an initial, tiny, position in Ocata Therapeutics (OCAT) pending further research.

On July 21, 2015 I bought an initial position in Acceleron (XLRN) because I was doing research for my article Accleron Has Two Potential Blockbusters for Seeking Alpha and I liked what I saw. Acceleron has a partnership with Celgene.

And finally, since I was quite cynical earlier in the year about Biogen's (BIIB) Alzheimer's early data, the updated data gave me a favorable impression. I have owned BIIB since 2009 or so, but well below my portfolio limit due to its high P/E ratio. So I bought more BIIB on July 24, 2015 for $306.96. True, by the end of the day it had fallen a bit lower, but consider that its 52-week high had been $480.18 back on March 20, 2015. Really, not that much has changed since March, it shows you how dependent day-to-day auction prices are on emotion.

My general strategy is that I am a long-term investor. I may sell a stock when it had done so well that it exceeds my portfolio limits, or when I have other reason to think it has become so over valued it is no longer a good long-term investment.

Keep diversified!