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Sharp +50% Gains at Biogen (BIIB)
Published:
February 18, 2008
As shareholders, we all like to
see our company launch an exciting new product. Maybe it's a
potential blockbuster drug, a trendy cell phone, or a popular
new software title. Regardless of the
product, the introduction of a big hit can often bring in
billions in incremental revenues and send a company's shares
soaring.
However, before those products can hit the market, they must
first graduate from the research and development (R&D)
department. Investments made in R&D may represent cash going out
the door today, but they can pay off big tomorrow -- and often
make the difference between a stagnant company and one with
heady growth on the horizon.
With all this in mind, Paul Tracy, editor of our StreetAuthority
Market
Advisor newsletter, is always on the lookout for
innovative companies that make the most of their R&D budgets.
And in the August 2005 newsletter, he set out specifically to
identify a select group of firms that go above and beyond when
it comes to new product development.
That search turned up a number of winning stocks for readers,
including biotech giant Biogen Idec (Nasdaq: BIIB, $62.20).
As Paul pointed out at the time, Biogen maintains the third-largest R&D budget in its industry -- pumping more than 30% of
its $2-plus billion in annual revenues into R&D. As a result, the
company had a full pipeline of promising new drugs in various
stages of clinical trials, including treatments for everything
from psoriasis to cancer to congestive heart failure.
Since that initial profile, Biogen's earnings have more than
tripled, soaring from $160 million in 2005 to $545 million over
the past year. Meanwhile, Wall Street has recognized the
company's success, pushing the shares from $41.58 to Friday's close
of $62.20 -- a sharp gain of nearly +50%.
In this month's
Market
Advisor newsletter, Paul zooms in on another company
that often turns new products into an influx of cash. The firm
operates a chain of casual dining restaurants whose innovative
menu and relaxed atmosphere have given it the highest customer
loyalty scores in the industry. And the brand is just hitting
its stride, with a store base that could eventually quadruple
from the current 1,100 units to more than 4,000. Those along for
the ride could see the shares follow a similar path.
Follow
this link to learn more.
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Nathan Slaughter
StreetAuthority Staff Writer
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Income Security
of the Month
Our "Income Security of the Month" for July 2008 invests in
a fast-growing overseas market that doesn't get much exposure in the
mainstream financial press. And although it typically makes enormous
annual dividend payments -- it has paid an average dividend of 24.9%
per year over the past five years -- this fund is perhaps most
appealing for its total return potential. Specifically, the fund has
delivered total returns of +263.9% since 2003, and
it ranks in the top 10% of its category over the past decade.
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Top
10 Stocks for 2008!
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Ten Stocks for 2008. |
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