5 Best Pharmaceutical Stocks to Buy According to Billionaire Kerr Neilson

1. Amgen Inc. (NASDAQ: AMGN)

Neilson’s Stake Value: $82,000
Percent of Kerr Neilson’s 13F Portfolio: 0.01%
Number of Hedge Fund Holders: 49

Amgen Inc. (NASDAQ: AMGN) is a U.S based multinational biopharmaceutical company committed to unlocking the potential of biology for patients suffering from serious illnesses. The company recently announced that Humira, the equivalent of AbbVie’s blockbuster rheumatoid arthritis drug, is now available in Canada. The drug is used in the treatment of 11 chronic inflammatory conditions.

The company’s AMGEVITA is also available a prefilled pen and a prefilled syringe and comes in different quantities to meet various prescriptions. 

Amgen recently announced its financial results for Q1 2021 with 4% increase in revenue to $5.9 billion. The increase is mainly attributed to lower net selling prices partially by increase in trading volume. The results further point to the growing challenges being presented by the COVID-19 pandemic with regard to access to medical facilities. 

Amgen reported a 5% drop in product sales despite recording a double digit growth in trading volumes. During the quarter, Amgen’s GAAP earnings per share (EPS) dropped by 8% to $2.83 mainly due to drop in revenues. The company’s GAAP operating income dropped 10% to 2.1 billion while GAAP operating margin dropped by nine percentage points to 38.1%.

Amgen Inc. (NASDAQ: AMGN) recently announced the completion of its tender offer to buy all outstanding shares of common stock of Five Prime Therapeutics. The shares were priced at $38.00 per share in cash, and Amgen is expected to pay around $1.9 billion to complete the deal.

Distillate Capital, in their Q4 2020 investor letter, said that they are optimistic in Amgen Inc. (NASDAQ: AMGN), and that they acquired a position in the company. Here is what Distillate Capital has to say about Amgen Inc. in its letter:

“One of the biggest additions to the portfolio in the rebalance was Amgen Inc. The company underperformed the S&P 500 Index last quarter even though its free cash flow estimates increased. Because the portfolio’s weighting methodology is linked to free cash flow, position sizes increased to reflect improving fundamentals relative to prices, and the more attractive valuations that result.”

You can also take a peek at Billionaire Stan Druckenmiller’s Top 10 Stock Picks and John Rogers’ Top 10 Stock Picks. 

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