A Bargain-Priced Biotech

Selling at just 11 times earnings, Amgen looks like a good deal for patient investors.

It takes guts to buy a stock when it's down and the bad news shows little sign of abating. But such bottom-fishing can be enormously profitable if you're right about the long-term prospects of a company that the here-and-now crowd on Wall Street can't stand. Take struggling biotech giant Amgen (symbol AMGN). The stock, trading at $48 in mid January, is down 44% from its record high, set in September 2005.

The market is spooked by reports about the company's key anemia-fighting drugs, Epogen and Aranesp. Together, the two products recently accounted for 45% of Amgen's annual sales of about $14.6 billion and for 60% of profits, expected to have been about $5.9 billion for 2007.

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Anne Kates Smith
Executive Editor, Kiplinger's Personal Finance

Anne Kates Smith brings Wall Street to Main Street, with decades of experience covering investments and personal finance for real people trying to navigate fast-changing markets, preserve financial security or plan for the future. She oversees the magazine's investing coverage,  authors Kiplinger’s biannual stock-market outlooks and writes the "Your Mind and Your Money" column, a take on behavioral finance and how investors can get out of their own way. Smith began her journalism career as a writer and columnist for USA Today. Prior to joining Kiplinger, she was a senior editor at U.S. News & World Report and a contributing columnist for TheStreet. Smith is a graduate of St. John's College in Annapolis, Md., the third-oldest college in America.