Friday, November 7, 2014

2 Biotech Stocks to Buy After Earnings

Two of my favorite biotech companies reported third-quarter results today, and they did not disappoint. If you haven’t already picked them up, both of these stocks are solid “buys” at current prices.
Let’s take a look…
Actavis (ACT)


Actavis (ACT) surpassed analysts’ sales and earnings expectations for the third quarter. Actavis reported a net loss of $1.04 billion, or $3.95 per share, compared with last year’s net income of $65.6 million, or 49 cents per share.
These results include costs from Actavis’ recent acquisition of Forest Laboratories for $25 billion. Excluding special items, adjusted earnings were $3.19 per share, topping the $3.10 consensus earnings-per-share estimate by 3%. Meanwhile, net revenue soared 83% year-on-year to $3.68 billion. Analysts were looking for $3.63 billion in revenue. So, Actavis posted a 1.4% sales surprise.
And it appears that the best is yet to come: Actavis lifted its fiscal 2014 outlook. Actavis now expects adjusted earnings between $13.51 and $13.61 per share, up from the previous range of $13.02 to $13.32 EPS. The guidance from Actavis is also well above the Street view of $13.29 per share.
ACT is an A-rated Strong Buy in my Portfolio Grader screening tool.
Jazz Pharmaceuticals (JAZZ)


Jazz Pharmaceuticals (JAZZ) reported strong third-quarter results thanks to continued success with specialty drugs Xyrem, Erwinaze and Defitelio. Compared with the year ago quarter, Jazz Pharmaceuticals’ revenues climbed 32% to $306.6 million, topping analysts’ estimates of $302.5 million in revenue.
Jazz Pharmaceuticals’ net income fell 66% year-on-year to $25.77 million, or 41 cents per share, due to a $75 million upfront payment for the rights to defibrotide in the Americas. Excluding special items, adjusted earnings jumped 30.9% year-on-year to $2.33 per share, which also trounced the $2.22 consensus EPS estimate by 10%.
Jazz Pharmaceuticals also lifted its sales and earnings forecast for fiscal 2014. For the current year, Jazz Pharmaceuticals expects adjusted earnings in a range of $8.20 to $8.35 per share on revenues of $1.15 billion to $1.17 billion. Earlier, Jazz Pharmaceuticals had expected adjusted earnings of $8.00 to $8.25 per share on revenues of $1.13 billion to $1.17 billion. Jazz Pharmaceuticals’ revised forecast is also above the Street view of $8.18 EPS on $1.16 billion in revenue.
JAZZ is an A-rated Strong Buy.
By Louis Navellier, Editor, Blue Chip Growth




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