Top Stock to Buy #3 – AmerisourceBergen Corp. (ABC)
Pharmaceutical services company AmerisourceBergen Corp. (NYSE:ABC) provides drug distribution primarily in the United States and Canada. Because of its ability to profitably manage through the recent economic downturn and its “focus on generic and oncology drugs which are among the fastest growing and most profitable revenue drivers,” according to S&P, this stock could command a higher-than-average price-to-earnings (P/E) ratio.
Recently, ABC reached a $400 billion, 10-year distribution contract with Walgreen Co. (NYSE:WAG) and Alliance Boots. As a result, Goldman Sachs (NYSE:GS) and other analysts raised their earnings and price targets for the stock.
On that news, the stock gapped through the resistance line of a well-defined bull channel on heavy volume. Since continuation gaps often close, traders should consider a buy under price of $49 for ABC with a trading target of $54. But holding this stock as a long-term investment could yield significantly better results.