CHICAGO, Oct. 31, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Amgen (Nasdaq:AMGN-Free Report), Celgene (Nasdaq:CELG-Free Report), Biogen Idec (Nasdaq:BIIB-Free Report), Market Vectors Biotech ETF (AMEX:BBH-Free Report) and SPDR S&P Biotech ETF (AMEX:XBI-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Thursday's Analyst Blog:
Top-Ranked ETFs on Solid Biotech Earnings
Biotech stocks and the related ETFs have been the star performers this year despite some temporary glitches and rough trading in between. Encouraging industry trends, increasing merger and acquisition activities, expansion into emerging markets and ever-increasing health care spending led the sector to easily outperform the broader U.S. equity markets.
Though lofty valuations and regulatory concerns did bring in some pain to biotech stocks & ETFs, solid Q2 corporate earnings results from top biotech companies and strong fundamentals within this corner supported the space to make a strong comeback and emerge as winners (read: The Complete Guide to Biotech ETFs).
The space has yet again come out with flying colors this earnings season with most of the biotech companies topping the Zacks Consensus Estimates on both revenues and earnings. Also, most of the top biotech names have increased their guidance for 2014 both on the top and the bottom line, suggesting bright prospects ahead.
The world's largest biotech firm, Amgen (Nasdaq:AMGN-Free Report)has yet again topped the Zacks Consensus Estimate for third-quarter 2014 earnings as well as revenues. Gilead too managed to beat our estimates despite Solvaldi, their blockbuster hepatitis C treatment, missing the sales target. Other top players in the space including Celgene (Nasdaq:CELG-Free Report) and Biogen Idec (Nasdaq:BIIB-Free Report) have also easily managed to beat our estimates on both earnings and revenues.
GILD Earnings in Focus
The company reported solid third-quarter numbers with net income more than tripling to $2.73 billion from $789 million in the year-ago quarter. Adjusted earnings per share came in at $1.84, easily surpassing the Zacks Consensus Estimate of $1.64. Revenues rose 117% to $6.04 billion topping our estimates of $5.8 billion.
However, sales of Sovaldi fell 20% in the third quarter from the June period. Sovaldi's sales came in below market expectations at $2.8 billion, also down from the prior quarter sales of $3.48 billion, which dragged Gilead's shares 4% lower in after-market trading hours.
Lower-than-expected sales of Sovaldi can be blamed on GILD's new and improved combination, once-a-day pill, Harvoni, which has already been approved by the FDA earlier this month. Harvoni will be priced at a hefty $1,125/pill, or $94,500 for a 12-week course treatment as against $1,000/pill, or $84,000 for the regular 12-week course of Sovaldi.
However, the drug eliminates the need of additional therapies and many expect that the majority of patients will be able to take Harvoni for only eight weeks, lowering the cost to about $63,000 (read: Biotech ETFs Slip on Gilead Weakness; Buying Opportunity Now?).
Gilead raised the low end of its 2014 forecast for net product sales to $22 billion to $23 billion from $21 billion to $23 billion issued in July.
AMGN Earnings in Focus
The company reported earnings of $2.30 per share, well above the Zacks Consensus Estimate of $2.06, driven by higher revenues and profitability on Enbrel. Moreover, total revenues increased 6% to $5,031 million in the reported quarter, beating the Zacks Consensus Estimate of $4,918 million.
Amgen raised its guidance for 2014 yet again, topping our expectations. The company now expects to earn $8.45–$8.55 per share on total revenues of $19.8 billion to $20 billion, exceeding the Zacks Consensus Estimate for earnings and revenues of $8.24 per share and $19.6 billion, respectively (see: all the Healthcare ETFs here).
Market Impact
Given the earnings beat and solid growth outlook, Amgen shares jumped 6% to $157.19 in yesterday's trading session. Gilead's shares dropped 4% in extending market trading on account of the Solvadi sales miss. Though the stock might trade lower for some more days, it nonetheless has good long-term prospects thanks to the upcoming international release of Harvoni.
Other stocks, including Amgen, Celgene and Biogen, have also seen a surge in their shares following encouraging results (Read: Healthcare ETFs for your portfolio's wellness).
Given the encouraging results, all the Biotech ETFs have seen considerable gains in their prices for the past one week. Below we have highlighted two top-ranked biotech ETFs which investors can surely add to their portfolio given the solid Q3 earnings results and strong fundamentals in the space.
Market Vectors Biotech ETF (AMEX:BBH-Free Report)
This fund tracks the Market Vectors US Listed Biotech 25 Index, holding 26 securities in the basket. The product has so far amassed $615 million in its asset base and sees moderate trading volumes of roughly 97,000 shares a day.
Gilead, Amgen, Celgene and Biogen occupy the top four spots in the fund, with a combined exposure of 45%. The fund has returned 27.6% this year and charges 35 basis points as expenses. BBH currently has a Zacks ETF Rank #1 or Strong Buy rating.
SPDR S&P Biotech ETF (AMEX:XBI-Free Report)
This fund follows the S&P Biotechnology Select Industry Index and holds about 84 securities in its basket. It is quite well spread out across its components with none of the stocks having more than 2.5% allocation. In fact, Gilead, Biogen Celgene, Alexion and Amgen have a combined 7% allocation.
The ETF puts more focus on small- and micro-cap stocks at 76%, while mid and large caps account for the rest. The product has nearly $1.3 billion in AUM and sees solid volume of 383,000 shares per day. It charges 35 bps in annual fees and has returned 30% this year. XBI currently carries a Zacks ETF Rank #2 or Buy rating.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Get the full Report on AMGN - FREE
Get the full Report on CELG - FREE
Get the full Report on BIIB - FREE
Get the full Report on BBH - FREE
Get the full Report on XBI - FREE
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
[email protected]
http://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Logo - http://photos.prnewswire.com/prnh/20101027/ZIRLOGO
SOURCE Zacks Investment Research, Inc.
Related Links
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article