Tag Archives: NYSE:BMY

What Should Celgene Shareholders Do In Light Of The Bristol-Myers Squibb Deal?

Celgene (NASDAQ:CELG) stock appreciated about 21% as of writing, as there was news that Bristol-Myers Squibb (NYSE:BMY) was acquiring Celgene for about $74 billion.

What Should Celgene Shareholders Do?

The news actually pushed Celgene stock meaningfully closer to its fair value, according to Thomson Reuters‘ mean 12-month target of $105. As of writing, Celgene is trading at $80.84. So, it doesn’t make sense to sell at the current levels, as there’s still about $14 (nearly 17%) of upside according to BMY’s current stock price.

At the same time, there’s a risk that if the deal breaks down, Celgene stock could come tumbling down.

If you bought Celgene in the $60s in December, you’re now sitting on some nice gains, and no one will blame you for securing and booking the profit.

For those who have a longer-term investment horizon, it may be worthwhile to wait it out. If BMY combines with Celgene, it could be a good thing, as it merges the quality biotech and pharma companies to make a more diversified firm. Moreover, BMY also offers a stable dividend to give immediate returns.

Investor Takeaway

BMY is getting a good deal here. It’s paying a low multiple for Celgene, which has a higher margin and higher growth rate – BMY’s recent net margin and consensus estimated growth rate are 6.5% and 11-12.8%, respectively, while Celgene’s are 19.6% and 19.5-19.8%. BMY also has a stronger balance sheet than Celgene. Assuming the deal goes through, I think BMY is a better buy here.

The above is an excerpt. Read the full article here: What Should Celgene Shareholders Do In Light Of The Bristol-Myers Squibb Deal?

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Disclosure: At the time of writing, the author owns CELG.

Disclaimer: I am not a certified financial advisor. This article is for educational purposes, so consult a financial advisor and or tax professional if necessary before making any investment decisions.

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3 Large Caps Priced at Attractive Valuations

Share price declines of more than 25% can spell trouble. But for large caps with economic moats, declines can indicate bargains and future winners. Consider this diversified list of companies today for double-digit gains potential. They are excellent candidates for above-average returns to complement quality blue chips, which are expensive and slower growth.

Attractive Healthcare dividend stock

Bristol-Myers Squibb Company (NYSE:BMY) has focused on and has a leading position in immuno-oncology. It can have huge pullbacks based on clinical data releases, as was the case with the recent example of Opdivo, its cancer drug. As a result, the company’s share price is about 34% below its July-high.

At about $50 per share, Bristol-Myers trades at a P/E of 20. This is a more reasonable valuation compared to its previous P/E, north of 30 for the 17-18.3% per year earnings growth estimate for the next few years. For this year, Bristol-Myers expects EPS growth of 20-26%. Moreover, the company now yields 3%. Read More

Top 10 Health Care Stocks: Which To Buy? Part 3

Year to date, the SPDR S&P 500 Trust ETF (NYSEARCA:SPY) has outperformed Health Care ETF (NYSEARCA:XLV). The SPY has risen 6.6%, while the XLV has appreciated 4.1%. However, over the 5-year and 10-year periods, the XLV has outperformed the SPY. So, now that the Health Care sector as a whole underperforms the market in the short term, it may be time to consider investing new money in the sector.

Out of the three major drug manufacturers, Johnson & Johnson (NYSE:JNJ) is the highest quality and provides the steadiest growth and returns. However, it’s also the most expensive. To get a better value, consider Pfizer Inc. (NYSE:PFE) and Merck & Co., Inc. (NYSE:MRK) which trade at lower multiples with higher dividend yields to start.

To get more value and to maintain high quality, consider Amgen Inc (NASDAQ:AMGN) which trades at a reasonable multiple with an estimated growth of north of 7% per year and pays a safe and growing dividend.

UnitedHealth Group Inc (NYSE:UNH), Allergan plc (NYSE:AGN), and AbbVie Inc (NYSE:ABBV) are expected to deliver above average growth rates of more than 13% and they’re priced at reasonable valuations. However, investors should note AbbVie’s above-average debt levels and Allergan’s below average credit rating of BBB-.

Bristol-Myers Squibb Co (NYSE:BMY) and Gilead Sciences Inc (NASDAQ:GILD) are opposites. The former trades at more than 30x earnings with a growth rate of 20%. The latter trades at 7x earnings with a growth rate of 3%. Bristol-Myers is a growth play and Gilead Sciences is a value play.

The above is an excerpt from my Seeking Alpha article. So, to learn more about earnings estimates and dividend information of each company, check out the article here: Top 10 Health Care Stocks: Which To Buy? Part 3

If you like what you've just read, consider subscribing via the "Subscribe Here" form at the top right so that you will receive an email notification when I publish a new article.

Disclosure: At the time of writing, I own shares in AMGN, ABBV, and GILD.

Disclaimer: I am not a certified financial advisor. This article is for educational purposes, so consult a financial advisor and or tax professional if necessary before making any investment decisions.

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