Biotech stocks have been obliterated over the past week. The decline in prices is creating quite a few bargains. Amgen is supposed to earn $5 this year and $7 by 2013. It trades at $54 and has $7 in net cash on the balance sheet. The stock trades at a little over 9 times earnings net of cash. This compares to the overall market which trades at 17 times fantasy earnings.
A number of reasons have been cited for the poor performance. Some products missed on revenue. Galleon was holding biotech stocks. Yada, yada, yada. There is always some story when stocks trade at bargain prices. If we melt into the end of the week, I might look to buy Amgen.