Wednesday, June 30, 2010

What Ails Amgen?

Biotech giant Amgen (Nasdaq:AMGN) may not be considered a pharmaceutical company yet, but the market is certainly treating it like one. Whether you consider the P/E ratio, the price-book, price-cash flow, or EV/EBITDA ratios, Amgen trades more or less in line with the likes of Pfizer (NYSE:PFE), Lilly (NYSE:LLY) and GlaxoSmithKline (NYSE:GSK) than Celgene (Nasdaq:CELG) or Genzyme (Nasdaq:GENZ).  


This would be all well and good if Amgen was just another typical big-cap pharmaceutical company. Though Amgen does have some issues in common, I think the differences are more significant than the similarities. Most significantly, it looks as though the market is assuming that Amgen is going to grow at a pace similar to most of these large companies (which is to say, "not much"), and this is where the stock could ultimately outperform.  

The full article can be read at:
http://stocks.investopedia.com/stock-analysis/2010/What-Ails-Amgen-AMGN-PFE-LLY-GSK-CELG0630.aspx

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