With shares of Celgene Corporation (NASDAQ:CELG) trading at around $110.18, is CELG an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
C = Catalyst for the Stock’s Movement
Let’s get the one key negative out of the way first, which is increased competition. Otherwise, Celgene is very attractive. You could say that the Apremilast Phase III study saw mixed results, which would be a potential negative, but positives outweighed negatives. Getting to the certain positives, Celgene’s cancer drug, Revlimid, is seeing increased international exposure. And the FDA approved Pomalyst in early February, which should also help growth. In addition to these positives, there is a lot in the pipeline. Cegelen is far from a one-trick pony. That being the case, there will always be future potential. If you’re not interested in potential catalysts for growth and you just want the biggest selling point of all, it’s that Celgene expects to triple its profits within a few years. If you’re a trusting soul, then this should make you feel pretty warm and fuzzy inside.
At the current time, Celgene has strong margins, an ROE of 25.99 percent, excellent cash flow, and it consistently buys back shares of common stock.
Let’s take a look at more important numbers prior to forming an opinion on the stock…