Celgene (CELG) Biotechnology Stock is Cheap Right Now

Celgene (CELG) stock has dropped in price massively since its September 2017 highs. This could be a good time to buy CELG stock cheaply.

Celgene (CELG) shares are extraordinarily cheap, writes Jefferies’ Michael Yee. Of course, buying cheap stocks just because they are cheap isn’t a great investment strategy, especially with the sector in a bear market. Yet he believes eventually the shares will fight their way back, although he admits the “timing is difficult.”

Where we were: Celgene has badly trailed the market in 2018, as well as biotech peers.

Where we’re headed: The timing isn’t certain, but ultimately Jefferies believes that the market will start to give Celgene credit for its pipeline and robust free cash flow.

While the health-care sector has flourished this year, the rising tide hasn’t lifted all boats. Biotech stocks have been a laggard, with the iShares Nasdaq Biotechnology ETF (IBB) falling 3.3% year to date, and the SPDR S&P Biotech ETF (XBI) off 8%. However, few stocks have been as punished as Celgene which has tumbled more than 35% in 2018.

This could be a great time to buy Celgene biotech stocks cheaply and wait for the share prices to rally again.


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