Pharma Stocks on 52 Weeks High Level

PUBLISHED: 17 Sep 2012 @ 18:35 | Comments (0) | More info about Ed Liston

Markets are currently trading now and seem range-bound, but there is plenty of action on individual stock level. Bucking the general market trend, there are some stocks gaining strength and touching their 52 weeks high price level.

This price level serves as an important indicator as many investors and analysts take it as a bullish sign. In conjunction with other parameters, this indicator is generally used by investors as a purchase signal. I take extra precaution to make sure that the stock is advancing based on some solid positive news. I also pay attention to the trading volume, bigger the volume pushing the stock high, the better it is. While using this indicator, I remain careful that the stock is not the part of ‘pump and dump’ schemes. So, with due diligence, you can use 52 weeks high price levels to make your purchase decisions. Let’s take a look at the stocks touching the highs during today’s trading session:

Gilead Sciences (NASDAQ:GILD): This biopharmaceutical stock reached a new 52 week high of $65.31 today. The stock is currently a bit off its highs and is trading at $64.80, up 4.49 percent from its previous close. Gilead Sciences have been performing well on the stock market from last couple of trading sessions. It has received price target upgrade from J.P. Morgan and its new target has been pegged at $75, up from previous target of $70. The stock has gained about 60 percent this year so far. I am particularly positive about this company as it has just received the FDA approval for its drug Truveda. The drug can now be used as the first treatment for preventing HIV. It is also working on other HIV drugs as well as on developing therapies for Hepatitis C. Gilead Sciences owns a dominant share in HIV market and is likely to repeat the feat in Hepatitis market as well. The stock’s lowest price point for the past 52 weeks stands at $34.45, which is about 50 percent down from its current market price. The company had announced its latest Earnings per Share at $3.30. It has solid market capitalization of $49.01 billion and the stock has beta of 0.61. In the view of recent upgrades and solid performance, the stock is on my buy shortlist.

Ariad Pharmaceuticals Inc. (NASDAQ:ARIA): Yet another pharmaceutical stock setting a new high. Ariad Pharmaceuticals created at new 52 weeks high at $23.72. The stock is currently trading at $23.33, up 0.76 percent. Bank of America upgraded the stock from ‘Neutral’ to ‘Buy’. Its price target was also elevated from $20 to $26, which denotes that despite touching its 52 weeks high, the stock still has upside left in it. The stock has been doing pretty good lately and has been touching new 52 weeks high from earlier this month. The company has been granted accelerated review status for its leukemia drug by EU. The new status is likely to considerably shorten the time required for the assessment of the drug. Ariad Pharmaceuticals is also seeking the similar status from the US Food and Drug Administration as well. The leukemia drug Ponatinib is expected to compete with established drugs such as Tasigna and Sprycel. The company stock is currently trading at the beta of 1.29 and while the company has rather dismal Earnings per share of -$0.98, the current movements in the stock price are certainly encouraging. Ariad Pharmaceuticals is looking forward to establish its European Headquarters in Switzerland by the end of this year. This shows the confidence of management about the company’s future performance.

United Therapeutics Corporation (NASDAQ:UTHR): The stock created yet another 52 weeks high of $58.43 today. The company had suffered a setback when it reported lower profit for the second quarter of the year in July. However, the stock has done well since then and created a couple of new highs en route. Ariad Pharmaceuticals has solid market capitalization base at $3.01 billion and its stock is trading at Price Earnings ratio of 12.36. The company has healthy financial and liquidity position. However, it has recently received rating downgrade from Standpoint Research, which downgraded it from ‘Buy’ to ‘Hold’. United Therapeutics recently also expanded its Pulmonary arterial hypertension portfolio. However, in comparison to its peers, the company seems to be stuck. Further, at the current price level, I would prefer to sit and watch for appropriate price level to start any position in this stock. The stock is currently trading at $58.10, up 1.65 percent high.

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