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AMGN STOCK WRITE UP


AMGN

  • P/E: 16.1
  • GAAP EPS Y-O-Y GROWTH LAST QUARTER: $.22
  • SECTOR: HEALTH TECHNOLOGY
  • ASSETS-LIABILITIES: 1.62
  • DIVIDEND: 2.54%

Amgen is a leading biotech company with a solid financial foundation. It has managed to reduce its spending on research and development while increasing revenue through its sales of established drugs such as Enbrel, and Prolia. The company has several rapidly growing drugs that are newer to the market, with many drugs in the company's pipeline.
In its last quarter, Amgen posted 7.7% revenue growth with 7.5% net income growth. The company spent less, however, in the most recent quarter when compared with the comparable quarter from the prior year, on research and development. The reduction in operating margin came from an increased interest expense in the quarter. Although the company spent less on research and development, its revenue did increase. Amgen is continuing to innovate despite reduced research and development budget, with several drugs in late stage trials. The company will be able to sustain growth if its upcoming drugs are successful.
Robert A Bradway, the company's CEO, previously worked as an investment banker in Morgan Stanley's healthcare division. Although Amgen lost $150 million of its revenue on its largest drug, Enbrel, Marketwatch reports that the company narrative and pipeline are positive. Positive news surrounding the company's Repatha, Prolia, and Xgeva drugs could be promising for the company, according to Marketwatch. Wall Street has predicted the company will report earnings of $3 in the quarter reporting 4/26/2017.
The company has a solid financial foundation. Its price-to-earnings multiple is relatively low, giving the share price opportunity to increase to reveal the company's true value. Additionally, a large yield provides investors of AMGN with guaranteed investment return at 2.54%. Amgen has a good ratio of assets to liabilities, and is reducing its operation costs while its revenue is increasing. While Amgen is not the largest company in its sector, it has solid growth and strong financial backing.

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