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Amgen's (NASDAQ:AMGN) been dropping and I keep buying, but I'm nearing a full stomach on the biotech.

I used the proceeds from last week's sale of Merck (NYSE:MRK) to buy Amgen, and after this latest buy ($56.06), I'm pretty much at my max position on Amgen (AMGN - $56.06).

Amgen (AMGN) has been selling off after an FDA panel recommended stronger warning labels and further clinical studies on its Aranesp drug. But any short term bad news from this is already in the stock. And Wall Street loves to sell off stocks with short term bad news while they ignore the long term picture. Amgen is still in a good industry with good long term prospects. And while I think the industry needs some regulation, Democrats are not the threat to pharma research that many managers seem to think.

So why do I still like the prospects? The P/E ratio of around 14 versus long term earnings prospects make the stock cheap. See my posts on Amgen (here I am buying Amgen at $64 in February) or see the recent case for made by Alex Garcia at ValueInvesting Forum.

Post note: Amgen fell after the close on news that Medicare might limit payments on the drug.

Disclosure: I own Amgen. I have been accumulating Amgen since January.

AMGN 1-yr chart

AMGN

Source: Amgen Keeps Falling, I Keep Buying: Long Term Prospects Look Good