NEW YORK (TheStreet) -- Celgene Corp. (CELG) - Get Report rose $100 per share in short order starting from its low in 2012. Prices have been testing their 40-week or 200-day moving average, so longs should protect their positions.
There are two subtle technical clues I want you to focus on. First, the price of CELG made a high in early 2015 and then made a higher high recently. This higher high had less volume behind it than the earlier rally. Check the lower high on the On-Balance Volume line. The other point is, while the chart of the volume is "all over the place," the momentum study is holding everything closely. While the price chart made a higher high so far this year, other indicators suggest further sideways price action.
Separately, TheStreet Ratings team rates CELGENE CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate CELGENE CORP (CELG) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, reasonable valuation levels, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 8.8%. Since the same quarter one year prior, revenues rose by 21.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Biotechnology industry and the overall market, CELGENE CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for CELGENE CORP is currently very high, coming in at 96.94%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CELG's net profit margin of 15.63% significantly trails the industry average.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- You can view the full analysis from the report here: CELG Ratings Report