Amgen Inc. (AMGN)

Had owned it for a number of years but sold it recently. The growth trajectory going forward was slowing. Still pretty cheap and great cash flow. For him to get back into this stock, it would have to be significantly lower.

One of the leading biotech firms. They have a number of new drugs that came out. Dividend yield of 2.8%. Market cap of $124 billion. (Analysts’ price target is $196.95)

Pharmaceutical stocks have had a much more difficult time because of the presidential election, a time when they usually fall. However, they've bounced back as much as they normally do. This is not expensive. Trading at about 14X earnings and pays a nice dividend yield. Has some really great drugs in their pipeline. It continues to outperform on an earnings basis. He really likes this.

Sell?This company has a very high free cash flow yield and is very profitable. Have some drugs coming off patent, but biotech drugs generally survive the loss of patents because the drugs are hard to copy. Thinks you will be fine with this in the long run. 2.6% dividend yield.

Hold or Sell? Within biotech and picking a single name, this company would be the way to do it. They are more diversified. They’ve had a few good quarters in a row beating earnings, and are still only trading at 14-16 levels. Putting up pretty good growth. Now that we are more comfortable with interest rates not going to the moon, that takes off the risk, opening up the door to make this more investable.

A fairly inexpensive stock from a valuation standpoint. One of the granddaddies of biotech. This is probably a good hold here. The whole biotech area is getting a bit of a bid under it. There has been more positive action within that whole sector.

They create drugs similar to other bio-similar drugs. The competitive threats in biologics are a little bit similar. They got approval this morning for a biologic drug. He would like to see them consolidate here.

A fabulous company and has done very well, but their drugs are very mature and make up a very large piece of their total revenue and portfolio. They are spending a lot of money on R&D which has some promise, but no guarantee that they are going to be able to replace the revenue flow. The stock is trading at about 12X earnings. Prefers something that has more current opportunities and a deeper pipeline.

Trading range would be between $129 and about $180. Generally, he likes breakouts, but the chart shows that breakouts in the past have failed. He would be a little concerned with this.

He would advocate Gilead (GILD-Q) instead. It has one of the strongest hepatitis C franchises in the world. This stock is down 58% from its all-time high and trading at less than 9X earnings with a wonderful management team.

He likes this as an investment. It could be a core health care holding in any portfolio. They’ve generated tremendous cash flow and have a very strong balance sheet.

To take out the idiosyncratic risk, he would play Biotechs through the ETF iShares NASDAQ BioTech (IBB-Q). They all have their individual pipelines, but ultimately are going to trade very similarly, except for idiosyncratic risk, which you want to avoid. He wouldn’t advocate buying Biotech or Pharma right now given the pricing pressure of the policy measures, etc.

A larger cap pure play biotech company, that has a deep pipeline in bio-similars. He doesn’t see competition in the near term for their drug Enbrow (?), which is 3%-2.5% of their top line. They have some drugs that have come off patent, and need to backfill on the top line. One way they were looking to do this was through the PCSK9 drug, a cardio cholesterol lowering drug. Initially they came out with positive results. He bought a Put for some protection. A great balance sheet and an OK yield and modest growth. He is monitoring this. Rates it as a very strong Hold.

A great company. It is considered a biotech company, but has a market cap of over $1 billion. Trading at only 13X earnings and has a great free cash flow yield of almost 12%. He feels their pipeline is really strong and that the value of the company is 20% higher than it is here.

This is cheap, trading at roughly 13X versus the S&P at 17.4X. It has a free cash flow yield of roughly 8% plus a pretty good dividend yield of 2.56%. It is going to grow its dividend probably in the 10%-15% range. The stock is undervalued and underloved. It has held up really well despite all the tweets and all the other things going on. It is a biotech company, but it is one of the best and certainly one of the biggest. (Analysts’ price target is $189.50.)