U.S. equities bounded higher on Monday as President Donald Trump hinted that talks with Chinese officials over trade were continuing — something that Beijing denied. On the surface, it looks like another Trump “Sunday Night Special” started the week off on a positive note after the futures were down hard in overnight trading.
In other words, it looks like Trump is playing fast and loose with the facts to keep stock prices higher. Which for millions of investors watching their 401(k) balances, is just fine.
With trade temporarily removed as an issue to be concerned about, at least for today, investors are instead focusing on some corporate M&A activity in the biotechnology space. Biotech stocks overall, as represented by the iShares Biotechnology ETF (IBB), are holding up fairly well amid recent market volatility. A rebound to test the early July highs seems in order.
And these four stocks look ready to lead the way:
Amgen (NASDAQ:) shares are testing their record highs near $205 after Bristol-Myers Squibb (NYSE:) sold Celgene’s (NASDAQ:) Otezla psoriasis drug to the company for $13.4 billion in cash. All three of these stocks to buy are trading higher in response. The deal was done in response to an order by the Federal Trade Commission to secure BMY’s acquisition of CELG as it already had a competitive anti-inflammatory psoriasis drug in its pipeline.
The company will next report results on Oct. 29 after the close. Analysts are looking for earnings of $3.08 per share. When the company last reported on July 30, earnings of $3.97 per share beat estimates by 39 cents on a 3.1% decline in revenues. The company pays a 2.9% dividend yield.
Bristol-Myers Squibb (BMY)
BMY shares are testing above their 200-day moving average for the first time since the middle of 2018, rising out of a five-month consolidation range. Shares are benefiting from the sale of Celgene’s Otezla drug to Amgen, satisfying regulatory requirements for its purchase of Celgene. The deal hinges on Celgene’s pipeline of cancer-fighting drugs in development.
The company is also being noticed for its dividend payout, which totals a 3.5% yield. BMY will next report results on Oct. 24 before the bell. Analysts are looking for earnings of $1.06 per share on revenues of $5.85 billion. When the company last reported on July 25, earnings of $1.18 beat estimates by 12 cents on a 10% rise in revenues.
Celgene’s shares look ready to break out of a five-month consolidation range with a push up and over the $100-a-share level. As a reminder, the company’s $74 billion buyout by Bristol-Myers Squibb works out to $50 in cash and one share of BMY, which is worth about $98 right now. This stock now basically trades as a derivative of BMY shares, as odds of the acquisition being approved move towards 100%.
The company will next report results on Oct. 24. Analysts are looking for earnings of $2.70 per share on revenues of $4.39 billion. When the company last reported on July 30, earnings of $2.86 beat by 24 cents on a 15.4% rise in revenues.
Mylan (NASDAQ:) shares look ready to rise off of a solid base of support near $19 that has been in play since late May. Back in July, the company agreed to combine with Pfizer’s (NYSE:) off-patent business, giving MYL’s shareholders 43% of the combined company. Coverage of the stock was initiated back in June by Barclays analysts with an overweight rating.
The company will next report results on Nov. 5 before the bell. Analysts are looking for earnings of $1.14 per share on revenues of $3 billion. When the company last reported on July 29, earnings of $1.03 per share beat estimates by eight cents on a 1.5% rise in revenues.
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