Early adapters tend to recognize trends before the mainstream. Successful investors are no different. They often are the first to purchase stocks that soon become everyone's favorite. Biotechnology stocks present an intriguing opportunity for the savvy investor. Today we compiled a list of high-yield biotechnology companies that have plenty of room to grow.
The Net Margin is a profitability metric that illustrates, by percentage, how much of every dollar earned gets turned into a bottom line profit. This is just one of many profitability metrics used by investors and analysts to better understand what the company is being left with at the end of the day. Generally, a company that can expand its net profit margins over a period of time will see its stock price rise as well due to the trend of increasing profitability. Net Margin = Net Income/Total Revenue
EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. EPS growth rates help investors identify stocks that are increasing or decreasing in profitability. This profitability metric is generally a key driver in the price of the stock as it directly correlates to the profitability of the company as a whole.
We first looked for biotechnology stocks. We then looked for companies that analysts rate as "Buy" (2 < mean recommendation < 3). From here, we then looked for companies with strong profitability (Net Margin [TTM] >10%)(1-year fiscal EPS growth rate>10%). We did not screen out any market caps.
Do you think these stocks offer both value and growth? Use our list along with your own analysis.
1) Celgene Corporation (NASDAQ:CELG)
Celgene Corporation has an Analysts' Rating of 1.70, a Net Margin of 29.34%, and an Earnings Per Share Growth Rate of 51.89%. The short interest was 1.65% as of July 24, 2012. Celgene Corporation, a biopharmaceutical company, discovers, develops, and commercializes various therapies to treat cancer and immune-inflammatory related diseases primarily in the United States and Europe.
The company's commercial stage products include REVLIMID, an oral immunomodulatory drug for the treatment of patients with multiple myeloma and myelodysplastic syndromes (MDS); VIDAZA, a pyrimidine nucleoside analog to treat various subtypes MDS and acute myeloid leukemia; and THALOMID for patients with multiple myeloma, and for the prevention and suppression of the cutaneous manifestation of erythema nodosum leprosum recurrence. It also offers ABRAXANE to treat metastatic breast cancer; and ISTODAX for the treatment of cutaneous and peripheral T-cell lymphoma.
2) ONYX Pharmaceuticals, Inc. (NASDAQ:ONXX)
Onyx Pharmaceuticals, Inc. has an Analysts' Rating of 1.80, a Net Margin of 15.28%, and an Earnings Per Share Growth Rate of 187.75%. The short interest was 9.24% as of July 24, 2012. Onyx Pharmaceuticals, Inc., a biopharmaceutical company, engages in the development and commercialization of therapies that target the molecular mechanisms that cause cancer in the United States and internationally. The company, through its collaboration agreement with Bayer HealthCare Pharmaceuticals, Inc., develops and markets Nexavar (sorafenib) tablet, a multiple kinase inhibitor for the treatment of liver cancer and advanced kidney cancer.
3) Biogen IDEC Inc (NASDAQ:BIIB)
Biogen Idec Inc. has an Analysts' Rating of 2.10, a Net Margin of 24.53%, and an Earnings Per Share Growth Rate of 27.93%. The short interest was 1.04% as of July 24, 2012. Biogen Idec Inc. discovers, develops, manufactures, and markets therapies for the treatment of neurodegenerative diseases, hemophilia, and autoimmune disorders in the United States and internationally.
Its marketed products include the AVONEX for the treatment of relapsing multiple sclerosis (MS); RITUXAN for treating relapsed or refractory, CD20-positive, and B-cell Non-Hodgkin's lymphoma (NHL); TYSABRI to treat relapsing MS; FUMADERM for the treatment of severe plaque psoriasis in adult patients; and FAMPYRA, an oral compound for the improvement of walking in adult patients with MS with walking disability.
*Company profiles were sourced from Finviz. Financial data was sourced from Finviz and Google Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.