Stephanie Link: Notes on Celgene
This is a premier biotech company with a great pipeline, strong balance sheet and fabulous management team. So a nearly 12% drop in one day for a blue chip like this was enough to peak our interest. Jim still believes it has $9 in earnings power in 2015. I looked at the valuation at 11.5x forward estimates versus its historical average of 23x which makes this pretty compelling. But I mentioned that this is a market looking for dividend yield and CELG doesn't offer one currently. Jim countered with Johnson & Johnson(JNJ) as an alternative -- especially if the company decides to break up -- to which I said the one we own the best one in the sector in Action Alerts Plus, Abbott Labs(ABT) , which has catalysts on the horizon. The jury is still out for us on Celgene as to whether we'll add it to the fund -- but it is interesting and on the watch list.