Two More Good Reasons to Buy Celgene Corporation (CELG)

Stock buyback
The other good news from Celgene Corporation (NASDAQ:CELG) is that the company announced a $3 billion stock buyback. This comes on the heels of a previous repurchase of $2.5 billion of shares. Around $1.8 billion of that total was repurchased in 2013. Over the last four years, Celgene Corporation (NASDAQ:CELG) has bought back $6.5 billion of its stock.

This new buyback represents around 6% of Celgene’s current market cap. Although the company’s trailing price-to-earnings multiple of 37 might seem high at first glance, I think Celgene is getting a reasonably good deal in buying its shares at current prices. The biotech should experience earnings growth of at least 20% per year over the next several years.

Looking ahead
Celgene continues to show tremendous momentum. The latest news about apremilast and the share buyback add to a solid list of reasons to buy the stock even after its huge run-up in 2013. Revlimid continues to experience strong growth. Abraxane and Pomalyst are picking up steam. I still rate this stock as a buy.

The article 2 More Good Reasons to Buy Celgene originally appeared on Fool.com and is written by Keith Speights.

Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool recommends Celgene and Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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