With the biotech drug maker shares trading midday at $342.85 on Friday, July 6, fueled by encouraging test results for a new Alzheimer's drug, that's a gain of 24.8%. TheStreet Ratings has never issued a Sell recommendation on Biogen since coverage of the stock was initiated on November 9, 2001.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate BIOGEN INC as a Buy with a ratings score of B-. This is driven by a few notable strengths, 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, increase in net income and good cash flow from operations. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BIIB's revenue growth has slightly outpaced the industry average of 6.2%. Since the same quarter one year prior, revenues rose by 11.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.42, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 2.67, which clearly demonstrates the ability to cover short-term cash needs.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 56.9% when compared to the same quarter one year prior, rising from $747.60 million to $1,172.90 million.
- Net operating cash flow has significantly increased by 519.51% to $1,457.10 million when compared to the same quarter last year. In addition, BIOGEN INC has also vastly surpassed the industry average cash flow growth rate of 30.04%.
- You can view the full analysis from the report here: BIIB
-- Reported by Kevin Baker in Palm Beach Gardens, FL