Celgene Corporation (CELG) — On Oct. 15, as the broader market was bottoming, I gave traders my picks for the best undervalued buys in the market, and CELG stock was first on my list. In less than a week, shares ran from a low of $83.16 to my trading target of $92, and by the end of the month, they reached my longer-term target of $105.
I reviewed CELG stock again on Nov. 21, when it was trading at $108.25. I recommended traders buy shares on a pullback to $103 with a target of $120, but neither the buy under price nor the target has since been realized.
This biotech company develops small-molecule drugs for the treatment of blood-borne and solid-tumor cancers and inflammatory diseases.
Celgene was featured on Zacks as one of the “4 Top Ranked Biotech Stocks that Beat the Market in 2014.” Shares are up 34% year to date, and Zacks gives it a #1 ranking, citing strong sales of the company’s flagship product, Revlimid, a promising pipeline and products already in its portfolio with blockbuster potential.
Analysts at S&P Capital IQ have a “strong buy” rating on CELG stock with a 12-month price target of $122.
The consensus mean target is $116.68, and the high target is $145. Analysts estimate 2014 earnings will increase 23% to $3.68 per share, and 2015 earnings will jump 32% to $4.86 per share.
I repeat my buy on CELG stock. But volatility in the broader market is so high that buy orders may be executed under the November breakout at $108. The target for traders is $120. Long-term investors may buy shares at the current price with a target of $145.
