The success of Celgene Corp
Recently, I started a virtual stock portfolio on a website by the name of Wall Street Survivor. Since I’m not in the position financially to invest in the stock market for real (at least not yet), virtual stock trading will have to do for now.
I have 16 stocks in my portfolio. Here’s a brief asset allocation breakdown of my portfolio.
Large Cap Stocks = 47.2%
Mid Cap Stocks = 27.2%
Small Cap Stocks =25.6%
Considering the record-breaking ascension that the Dow Jones and the S&P 500 are in as well as my own comfort level, I will continue to have this portfolio geared toward large-caps. I have blue-chip stalwarts such as GE, KO, WMT, CVX and JPM represented in my portfolio. In the long-term, I would like my portfolio’s allocation to be geared mostly toward small-caps and mid-caps that I have researched heavily and identified as the blue-chip stalwarts of the future.
In addition, I have nine different sectors represented in my portfolio. They are weighted as follows:
Basic Materials 15.7%, Financials 12.3%, Utilities 6.3%, Consumer Goods 13.4%, Health-care 7.4%, Services 12.1% Conglomerates 4.3%, Technology 23.1%, Industrial Goods 5.3%.
There has been one stand-out growth stock that has not been a disappointment to my portfolio. Celgene Corporation (CELG) has continued to soar exponentially since my market order. After my initial purchase of Celgene Corp at $99.55 a few weeks ago, it currently is trading near a 52-week highs of $111.36. Celgene Corporation has appears undaunted in it’s growth prospects even in spite of some subpar news that they received today.
It turns out that the third phase of their drugs Apremilast Phase Study did not nearly have the same success as the second phase. Yet, Celgene has so much going for them that the aforementioned item may be a minor blip.
The FDA has recently approved a Celgene drug by the name of Pomalyst. Another drug, Revlimid has grown exponentially. According to research done by the S&P, Revlimid is expect to grow by 12% in sales in 2013 and 13% by 2014. Celgene has a operating cash flow of over 2 billion and has a solid debt to equity ratio. Additionally, Celgene’s revenue has increased from 2.26 billion in 2008 to 5.51 billion dollars in 2012.
Biotech computer Gilead Sciences had outpaced Celgene in it’s one-year and three-year charts. 2013 has been a different story. So far, Celgene has outpaced Gilead Sciences 40.4% to 22.29% this year.
The S&P still believes that this stock has more growth ahead. They believe that Celgene’s gross margins will exceed 94% for the next two years due to an enhancement in manufacturing efficiency. Additionally, they have stopped the sale of drugs that have produced lower profit margins. Thus, the increased attention to the drugs that are catapulting the company’s growth should make investors quite happy.
Presently, the S&P still rate this stock as a Strong Buy. I see nothing along the horizon that will stop this stock from reaching the S&P’s projected 12 month target price of $125.00.
There are only three words to describe this equity.
Bulls on Parade.