Electronic Arts Inc. (EA) and 4 More Long-Term Investment Picks From Ray Dalio

Celgene Corporation (NASDAQ:CELG) expects 2012 revenues up 14% – due to Revlimid (drug) growth of 18% – and next year’s revenue growth to average 10%. Revlimid’s prospects remain strong, despite its application withdrawal for earlier stage multiple myeloma in Europe. What will eventually drive the long-term growth of the biopharma company will be its global expansion and introduction of new drugs in 2013. We believe that Celgene falls in the middle ground, not being an ‘exciting’ new biopharma company and not being a large stable drug company like Merck, and so it has been overlooked.

Celgene has a robust drug pipeline with 25 drugs in phase III or undergoing pivotal studies. With over $3.8 billion in cash, the biopharma company will also be able to grow by snatching up smaller drug makers. This stock has the highest long-term growth rate of any of Dalio’s five picks mentioned here, which is at 22%. Couple this with its forward P/E of 14x and Celgene is not only a long-term growth play but also a growth at a reasonable price pick. Billionaire Ken Griffin – founder of Citadel Investment Group – is one of Celgene’s biggest name investors (check out Ken Griffin’s newest picks).

Cardinal Health, Inc. (NYSE:CAH) is expected to see FY2013 revenues down 7% due to the loss of its large distribution contract with Express Scripts. Its stock is flat over the past six months. We see an interim buying opportunity, though, as a record number of branded drugs will come off patent protection in 2013, which will only boost Cardinal’s generic business.

Cardinal remains one of the three major drug distributors in the U.S., and maintains a relationship with two major retail pharmacy chains, which generate over 40% of its revenues. Cardinal has a solid balance sheet with over $2 billion in cash, and the ability to generate upwards of $1 billion in free cash annually based on historical trends. For investors that do choose to join Dalio as an investor, they will be compensated with a 2.6% dividend yield – a payout ratio of just 28%. Billionaires Israel Englander and D.E. Shaw are two of Cardinal’s big name investors (see all of D.E. Shaw’s new picks).

What’s Dalio’s best high-growth play that pays a robust dividend?