CIO William Smead of Smead Capital Management says Amgen, Inc. (AMGN) is the highest-quality stock in his portfolio.
Amgen, from a corporate standpoint, is doing almost everything right. It has balance sheet, free cash flow, consistency of earnings, transparency, shareholder friendliness, etc. That’s as good as any company, I think, in the entire S&P.
It had great earnings, has a projected earnings growth in 2016 and trades at a discount to the S&P. In fact, the four largest biotechs trade at the lowest relative p/e to the S&P they have any time in the last 10 years, and Amgen is one of those.
Smead says Amgen is currently focusing on the expansion of different patient groups that their cholesterol-lowering drug Repatha will be approved for.
[Repatha] in effect is kind of the next generation of what people take when the statins have not done the job for them. So right now, they are in a position — as the FDA approves more and more patient groups that can take it, for people that statins will not lower their cholesterol, the bad cholesterol, and raise their good cholesterol enough, that is the number one thing to take, it’s the most effective thing, but the employees are excited about a lot of expanded patient groups that are allowed to be prescribed the medicine.
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