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BIIB

Peter Lynch Guru Analysis for Biogen Idec Inc.

$342.68
*  
0.36
0.1%
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*Delayed - data as of Sep. 2, 2014  -  Find a broker to begin trading BIIB now
Exchange: NASDAQ
Industry: Health Care
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Assessments & Analysis Based on August 29, 2014 close price: $343.04

  for the P/E/Growth Investor based on the criteria of Peter Lynch. Return to BIIB Guru Analysis

All Star Guru Scorecard

Source Go Chart %
Peter Lynch 74%
Benjamin Graham 71%
Validea 71%
Motley Fool 52%
David Dreman 64%
Martin Zweig 77%
Kenneth Fisher 30%
James P. O'Shaughnessy 50%



Detailed Analysis

Guru Score: 74%


Determine the Classification:

This methodology would consider BIIB a "fast-grower".


P/E/Growth Ratio: [FAIL]

The investor should examine the P/E (38.13) relative to the growth rate (24.41%), Based on the average of the 3, 4 and 5 year historical EPS growth rates, for a company. This is a quick way of determining the fairness of the price. In this particular case, the P/E/G ratio for BIIB (1.56) is fairly unattractive but still somewhat acceptable.


SALES AND P/E RATIO: [PASS]

For companies with sales greater than $1 billion, this methodology likes to see that the P/E ratio remain below 40. Large companies can have a difficult time maintaining a growth high enough to support a P/E above this threshold. BIIB, whose sales are $8,344.8 million, needs to have a P/E below 40 to pass this criterion. BIIB's P/E of (38.13) is considered acceptable.


Inventory To Sales: [PASS]

When inventories increase faster than sales, it is a red flag. However an increase of up to 5% is considered bearable if all other ratios appear attractive. Inventory to sales for BIIB was 8.11% last year, while for this year it is 9.51%. Since inventory has been rising, this methodology would not look favorably at the stock but would not completely eliminate it from consideration as the inventory increase (1.4%) is below 5%.


EPS Growth Rate: [PASS]

This methodology favors companies that have several years of fast earnings growth, as these companies have a proven formula for growth that in many cases can continue many more years. This methodology likes to see earnings growth in the range of 20% to 50%, as earnings growth over 50% may be unsustainable. The EPS growth rate for BIIB is 24.4%, Based on the average of the 3, 4 and 5 year historical EPS growth rates, which is considered very good.

 
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