NEW YORK ( TheStreet) -- Jim Cramer and I looked at Celgene (CELG - Get Report) this morning after Cowen upgraded the stock today. Last week shares fell 11.8% after the company announced that it pulled its Revlimid application for expanded use in Multiple Myeloma in Europe. The drug is already approved but the company was going after an earlier approval for patients and expanded labeling but was denied by authorities which wanted more information related to its efficacy and safety history.
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.