Answers to Why Amgen Shares are Valued as they are

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The shares of Amgen has had a remarkable development since early 2013, surpassing the S&P 500 by 6%. Even if it surpassed the broader market, Amgen has only matched up with the Health Care Sector Select Sector SPDR and has significantly fallen behind its highly capitalized biotech peer group. For example, all the shares of Regeneron Pharmaceuticals, Gilead Sciences, Celgene, and Biogen Idec for this year gained from 50% to 57% for the year alone.

This though is a misperception as Amgen is currently in its low growth phase of its product development. All its peers went through the same, but for Amgen with its market capitalization reaching US$85 billion, has been able to generate US$17 billion in sales. Amgen has had organic growth with about US$20 billion in cash and its equivalents, acquisition options are available in order to expand drug portfolio.

There is also the Amgen equity worth between US$89.9 billion and US$96.6 billion, which can be broken down between US$117 and US$126 per share. WIth its share value 16 times its operating cash flow, there are many beneifts that can be reaped and more to be received with this share os stock. When it comes out of its low development stage, the true value for Amgen would be realized.

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