8 Biotech Stocks That Should Be in Your Portfolio Right Now

Which biotech companies are the best investments for your portfolio? Consider buying any of these eight A+-rated stocks.

Despite falling victim to the market volatility during the late summer, biotech stocks are set to outperform by a healthy margin in 2015.

The Nasdaq Biotechnology Index, which follows Nasdaq-listed biotech stocks, is up 9.5% for the year. The S&P Biotechnology Select Industry Index, which tracks biotech stocks listed on the NYSE, AMEX, Nasdaq and Nasdaq Small Cap Exchanges, is up 12%. Meanwhile the S&P 500 is in negative territory for the year.

Investors like to hedge their bets on biotech stocks because, while there is huge risk, the industry has the potential to offer high returns. The stocks tend to be volatile. But the list below is of large-cap biotech stocks that are rated "buy" byTheStreet Ratings, TheStreet's proprietary ratings tool.

TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equity market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a buy yielded a 16.56% return in 2014, beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a buy yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

Here's the list of biotech stocks to buy. When you're done check out the best and worst biopharma CEOs of 2015. And don't forget to sell these six biotech stocks. 

1. AbbVie

Industry: Health Care/Biotechnology
2015 return: -12%
AbbVie Inc. (ABBV - Get Report) discovers, develops, manufactures, and sells pharmaceutical products worldwide.
12-Month Revenue Growth: 11.7%
12-Month Net Income Growth: -24.1%
12-Month EPS Growth: -26.5%
TheStreet Said: 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 ABBVIE INC as a Buy with a ratings score of B. 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 revenue growth, increase in net income, good cash flow from operations, expanding profit margins and growth in earnings per share. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the analysis by TheStreet Ratings Team goes as follows:

• ABBV's revenue growth has slightly outpaced the industry average of 13.4%. Since the same quarter one year prior, revenues rose by 18.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
• 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 144.9% when compared to the same quarter one year prior, rising from $506.00 million to $1,239.00 million.
• Net operating cash flow has increased to $2,155.00 million or 20.66% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 1.05%.
• The gross profit margin for ABBVIE INC is currently very high, coming in at 85.04%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, ABBV's net profit margin of 20.84% significantly trails the industry average.
• ABBVIE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ABBVIE INC reported lower earnings of $1.09 versus $2.56 in the prior year. This year, the market expects an improvement in earnings ($4.28 versus $1.09).
• You can view the full analysis from the report here: ABBV

2. Amgen

Industry: Health Care/Biotechnology
2015 return: 1.9%
Amgen Inc. (AMGN - Get Report) , a biotechnology company, discovers, develops, manufactures, and delivers human therapeutics worldwide. It focuses for the treatment of illness in the areas of oncology, hematology, inflammation, bone health, nephrology, cardiovascular, and general medicine.
12-Month Revenue Growth: 8.7%
12-Month Net Income Growth: 31.7%
12-Month EPS Growth: 32%

TheStreet Said: 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 AMGEN INC as a Buy with a ratings score of A+. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, reasonable valuation levels and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
Highlights from the analysis by TheStreet Ratings Team goes as follows:

• AMGN's revenue growth has slightly outpaced the industry average of 13.4%. Since the same quarter one year prior, revenues rose by 13.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
• AMGEN INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AMGEN INC increased its bottom line by earning $6.70 versus $6.65 in the prior year. This year, the market expects an improvement in earnings ($10.06 versus $6.70).
• 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 49.8% when compared to the same quarter one year prior, rising from $1,244.00 million to $1,863.00 million.
• Net operating cash flow has slightly increased to $2,874.00 million or 4.85% when compared to the same quarter last year. In addition, AMGEN INC has also modestly surpassed the industry average cash flow growth rate of 1.05%.
• You can view the full analysis from the report here: AMGN

3. Biogen

Industry: Health Care/Biotechnology
2015 return: -11.4%
Biogen Inc. (BIIB - Get Report) discovers, develops, manufactures, and markets therapies for the treatment of neurological, autoimmune, and hematologic disorders in the United States and internationally.
12-Month Revenue Growth: 17%
12-Month Net Income Growth: 43.4%
12-Month EPS Growth: 32%
TheStreet Said: 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 growth in earnings per share, increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:

• BIOGEN INC has improved earnings per share by 14.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BIOGEN INC increased its bottom line by earning $12.39 versus $7.82 in the prior year. This year, the market expects an improvement in earnings ($16.50 versus $12.39).
• The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Biotechnology industry average. The net income increased by 12.7% when compared to the same quarter one year prior, going from $856.86 million to $965.62 million.
• Despite its growing revenue, the company underperformed as compared with the industry average of 13.4%. Since the same quarter one year prior, revenues rose by 10.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
• The debt-to-equity ratio is somewhat low, currently at 0.62, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 2.84, which clearly demonstrates the ability to cover short-term cash needs.
• Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Biotechnology industry and the overall market, BIOGEN INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
• You can view the full analysis from the report here: BIIB

4. Celgene

Industry: Health Care/Biotechnology
2015 return: -0.64%
Celgene Corporation (CELG - Get Report) , a biopharmaceutical company, discovers, develops, and commercializes therapies to treat cancer and inflammatory diseases in the United States and Internationally.
12-Month Revenue Growth: 19.6%
12-Month Net Income Growth: 3.4%
12-Month EPS Growth: 4.2%
TheStreet Said: 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 CELGENE CORP as a Buy with a ratings score of B. 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 and expanding profit margins. 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:

• CELG's revenue growth has slightly outpaced the industry average of 13.4%. Since the same quarter one year prior, revenues rose by 17.8%. 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. When compared to other companies in the Biotechnology industry and the overall market, CELGENE CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
• The gross profit margin for CELGENE CORP is currently very high, coming in at 96.58%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -1.46% is in-line with the industry average.
• CELGENE CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CELGENE CORP increased its bottom line by earning $2.40 versus $1.69 in the prior year. This year, the market expects an improvement in earnings ($4.82 versus $2.40).
• The debt-to-equity ratio is very high at 2.88 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 2.79, which shows the ability to cover short-term cash needs.
• You can view the full analysis from the report here: CELG

5. Gilead Sciences

Industry: Health Care/Biotechnology
2015 return: 9.1%
Gilead Sciences, Inc. (GILD - Get Report) , a biopharmaceutical company, discovers, develops, and commercializes medicines in areas of unmet medical need in North America, South America, Europe, and the Asia-Pacific.
12-Month Revenue Growth: 52%
12-Month Net Income Growth: 79.8%
12-Month EPS Growth: 92.5%
TheStreet Said: 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 GILEAD SCIENCES INC as a Buy with a ratings score of A. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, attractive valuation levels, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the analysis by TheStreet Ratings Team goes as follows:

• The revenue growth came in higher than the industry average of 13.4%. Since the same quarter one year prior, revenues rose by 37.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
• GILEAD SCIENCES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, GILEAD SCIENCES INC increased its bottom line by earning $7.38 versus $1.83 in the prior year. This year, the market expects an improvement in earnings ($12.18 versus $7.38).
• 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 68.4% when compared to the same quarter one year prior, rising from $2,731.27 million to $4,600.00 million.
• The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, GILEAD SCIENCES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
• You can view the full analysis from the report here: GILD

6. Grifols

Industry: Health Care/Biotechnology
2015 return: -5%
Grifols, S.A. (GRFS) , a specialty biopharmaceutical company, develops, manufactures, and distributes plasma derivative products in the United States, Canada, Spain, rest of the European Union, and internationally.
12-Month Revenue Growth: 2.5%
12-Month Net Income Growth: 8.5%
12-Month EPS Growth: 9.5%
TheStreet Said: 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 GRIFOLS SA as a Buy with a ratings score of B. This is driven by a number of 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, reasonable valuation levels, growth in earnings per share, increase in net income and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:

• The revenue growth came in higher than the industry average of 13.4%. Since the same quarter one year prior, revenues rose by 24.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
• GRIFOLS SA has improved earnings per share by 27.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, GRIFOLS SA increased its bottom line by earning $1.66 versus $1.39 in the prior year. This year, the market expects an improvement in earnings ($2.02 versus $1.66).
• The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Biotechnology industry average. The net income increased by 30.2% when compared to the same quarter one year prior, rising from $120.27 million to $156.59 million.
• The gross profit margin for GRIFOLS SA is rather high; currently it is at 52.71%. Regardless of GRFS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GRFS's net profit margin of 14.42% is significantly lower than the industry average.
• You can view the full analysis from the report here: GRFS

7. Regeneron Pharmaceuticals

Industry: Health Care/Biotechnology
2015 return: 28.8%
Regeneron Pharmaceuticals, Inc. (REGN) , a biopharmaceutical company, discovers, invents, develops, manufactures, and commercializes medicines for the treatment of serious medical conditions worldwide.
12-Month Revenue Growth: 45%
12-Month Net Income Growth: 71.4%
12-Month EPS Growth: 68.2%
TheStreet Said: 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 REGENERON PHARMACEUTICALS as a Buy with a ratings score of B+. This is driven by a number of 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
Highlights from the analysis by TheStreet Ratings Team goes as follows:

• REGN's very impressive revenue growth greatly exceeded the industry average of 13.4%. Since the same quarter one year prior, revenues leaped by 56.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
• REGN's debt-to-equity ratio is very low at 0.12 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.18, 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 152.3% when compared to the same quarter one year prior, rising from $83.38 million to $210.40 million.
• Net operating cash flow has significantly increased by 445.89% to $892.85 million when compared to the same quarter last year. In addition, REGENERON PHARMACEUTICALS has also vastly surpassed the industry average cash flow growth rate of 1.05%.
• 36.32% is the gross profit margin for REGENERON PHARMACEUTICALS which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, REGN's net profit margin of 18.49% significantly trails the industry average.
• You can view the full analysis from the report here: REGN

8. United Therapeutics

Industry: Health Care/Biotechnology
2015 return: 22%
United Therapeutics Corporation (UTHR) , a biotechnology company, develops and commercializes products to address the unmet medical needs of patients with chronic and life-threatening conditions worldwide.
12-Month Revenue Growth: 14.3%
12-Month Net Income Growth: 242%
12-Month EPS Growth: 281%
TheStreet Said: 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 UNITED THERAPEUTICS CORP as a Buy with a ratings score of A-. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. 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, notable return on equity, attractive valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:

• UTHR's revenue growth has slightly outpaced the industry average of 13.4%. Since the same quarter one year prior, revenues rose by 17.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
• UTHR's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, UTHR has a quick ratio of 1.98, which demonstrates the ability of the company to cover short-term liquidity needs.
• The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, UNITED THERAPEUTICS CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
• The gross profit margin for UNITED THERAPEUTICS CORP is currently very high, coming in at 102.36%. It has increased significantly from the same period last year. Along with this, the net profit margin of 120.24% significantly outperformed against the industry average.
• You can view the full analysis from the report here: UTHR

By Laurie Kulikowski

Source:http://www.thestreet.com/story/13405818/1/8-biotech-stocks-that-should-be-in-your-portfolio-right-now.html?kval=dontmiss