2 Strong Long-Term Plays

Includes: BMY, MOV
by: Matt Schilling

In recent days, Amylin Pharmaceuticals (AMLN) and Movado Group (MOV) have both been hot off the press with news. Amylin could be an interesting investment for the long term, having recently turned down a bid from Bristol-Myers Squibb (NYSE:BMY). Movado Group, on its part, has both long-term investors and dividend players buzzing about its phenomenal quarter.

Amylin Pharmaceuticals, Inc: There are several people who strongly believe that the leak of information regarding the Bristol-Myers Squibb attempt at acquiring AMLN may have hurt certain marketing efforts. The primary concern is that AMLN will now be unable to find a non-US based marketing partner for its drug Bydureon. This could not only hurt AMLN's revenue, but open up market share possibilities for those companies directly competing with Bydureon.

When small drug makers create partnerships, they tend to make them less attractive in terms of a merger or acquisition by a larger drug maker. For example, BMY may have been less attracted to AMLN if it had had a marketing partnership already in place.

The next two quarters should play a key role in the growth and value of AMLN for two reasons. The first is earnings, if investors see results beating expectations by 10% or more, the stock could easily be trading in the $26-$29 range. The second is development, if AMLN can continue on a positive track for both Metreleptin and AC165198, which are both treatments for diabetic and obese patients, we could see significant growth in the stock.

Movado Group, Inc: The board increased the quarterly dividend to $0.05/share, which represents a 67% dividend hike, and the first increase since April 2011, when MOV restarted its quarterly dividend distribution. The dividend will be paid on April 24 to all shareholders of record as of the close of business on April 10.

Investors saw tremendous growth from MOV in Q4. Analysts were expecting the company to earn $0.10/share, Movado actually reported earnings of $0.30/share (a 200% increase over the same period last year). During its conference call, management had this to say:

"Our strong results for the fourth quarter and full fiscal year demonstrate the traction we are gaining from the strategic initiatives we began implementing last year," said CEO Efraim Grinberg. "We have refined our product lines and introduced more frequent innovation, both of which have improved our competitive brand." (I)

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

About this article:

Author payment: $35 + $0.01/page view. Authors of PRO articles receive a minimum guaranteed payment of $150-500. Become a contributor »
Problem with this article? Please tell us. Disagree with this article? .