) took a break from hitting new highs in November, but it got
back to it this week, aided in part by acquisition news.
The biotech giant's move to new high ground can be viewed as
an attempt to break out from a flat base with a 90.05 buy point.
Watch to see if the stock can close above that level amid strong
Beyond its generally promising chart action, Amgen has other
positive qualities. It has three-year and five-year EPS Stability
Factors of 3, not far from the calmest-possible grade of 0 on a
scale that runs to 99.
That steadiness suggests the company should be able to keep
paying its dividend, which provides an annualized yield of about
Thousand Oaks, Calif.-based Amgen also has an IBD industry
group with a strong ranking. The biotech group ranked No. 33 out
of 197 as of Thursday's IBD, although that's down a bit from
where it's been in recent weeks.
Plus, Amgen has drawn increasing ownership by U.S. mutual and
hedge funds over the past two quarters. That helps explain its
No. 7 ranking in Tuesday's IBD Big Cap 20 screen.
Amgen's acquisition news was a deal to buy privately held
Iceland-based gene researcher deCode Genetics for $415
The stock rose 2% in above-average turnover on Monday after
the deal was announced, then edged up Tuesday and Wednesday to
new highs before pulling back Thursday in light volume.
Analysts at S&P wrote that they liked the deal.
The analysts said: "We view the proposed transaction
favorably, and consistent with AMGN's focus on personalized
treatments based on genetic markers, particularly for cancer. We
think deCode's expertise in discovering genetic risk factors in
human disease should enhance productivity across AMGN's drug
S&P also has said that risks for Amgen include its "highly
competitive and regulated markets," but that's "mitigated by
AMGN's diversified product roster."
Amgen began paying a dividend last year. Another important
recent change was the naming in May of a new CEO, Robert Bradway,
who was previously the company's chief operating officer.