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Although markets have been shaky as of late, a few sectors have managed to hold up surprisingly well. In particular, there has been great strength in the health care space, as this segment is currently leading the market from a year-to-date look.
The sector is still up about 20% so far in 2013, even when taking into account the global sell-off, suggesting that health care is now the leader of the market. Yet when investors drill further into this space, they find a true outperformer; biotechnology.
This corner of the health care world has been crushing broad indexes lately, both in terms of the health care sector and the overall market. And in this winning space, one name that stands out and could continue to lead is undoubtedly Biogen (BIIB - Analyst Report).
Biogen in Focus
Biogen is one of the largest and most well-known names in the biotech sector, as the enormous company has a market capitalization of over $50 billion. The Massachusetts-based firm is probably best known for its MS drugs, although the company has a number of other therapies for various other diseases as well.
Like many other names in the sector, BIIB has surged to start 2013, continuing the firm’s solid run from a share price perspective. The company is actually up more than 30% YTD, and has added an impressive 125% over the past two years, suggesting that this has been a long growth story.
While some might feel like the company’s recent run indicates that the best days are behind Biogen, there are plenty of reasons to still be optimistic on the company. Analysts are currently expecting full year earnings growth of 21.4%, while the company is expected to grow earnings more quickly over the next five years than the previous five, meaning that this story could still have plenty of room to run.
This is further confirmed when investors look at the earnings estimate revision picture, as this is becoming more favorable as well. While analysts are somewhat mixed about the current quarter and next quarter, there is universal agreement on the current year and next year figures.
These estimates have risen markedly in the past few weeks, with the full year consensus rising from $7.66/share to $7.93/share. Meanwhile, the next year numbers have been even more impressive with the consensus surging from $8.77/share two months ago to its current level at $10.17/share.
Clearly, analysts are extremely bullish on the company’s long term prospects and their ability to grow earnings. For this reason, BIIB has managed to obtain a coveted Zacks Rank #1 (Strong Buy), as well as a Zacks Recommendation of ‘Outperform’, suggesting that great things are still ahead for BIIB.
The trend is your friend in the health care space, as this segment has surged so far in 2013, easily outpacing the broad market. This is particularly true when you drill down into the sector and focus on biotechnology, easily one of the best performing industries over the past year or so.
In this space, a real winner has been Biogen, one of the most famous names in the sector. This company has been a top performer so far this year and it is still expected to grow at a robust rate in the near term.
So if you are looking for a new investment in today’s turbulent market, BIIB could be a great pick. The stock remains well positioned to benefit from the current market focus on growth, and investors may want to consider making an allocation to this top ranked stock before it climbs higher once more.
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