GETTING STARTED Build a Strong Stock Portfolio Earnings: The Bottom Line Ten Clues to Strong Stocks Four Questions to Ask Before You Buy A Kid-Friendly Introduction to Stocks MORE... STOCK TOOLS Kiplinger's Stock Finder Test your risk tolerance What is the current yield from dividends? Which are better: income or growth stocks? Pick the Best 'Bankerage' Company Recent Columns Hilton: Rooms to Grow - Feb. 4, 2005 PepsiCo: Blue-Chip Carbs - Feb. 3, 2005 Google: On the Fast Track - Feb. 2, 2005 Sprint: What's Next(el)? - Feb. 1, 2005 Bank of America: Earning Interest - Jan. 31, 2005 Home Depot: Building on Success - Jan. 28, 2005 MORE ... STOCKS TO WATCH E-MAIL   Sign Up   Now you can have Stocks to Watch delivered to your inbox every day. Sign up now.

STOCKS TO WATCH

Amgen: Healthy Outlook

As the calendar year winds down, market watchers are wrapping up their predictions for the year ahead. Standard & Poor's just published its 2005 forecast issue of The Outlook, in which it names biotechnology company Amgen (AMGN) as one of ten stocks investors should consider betting on for superior capital gains.

S&P says combined sales of two of Amgen's anemia drugs -- Aranesp and Epogen -- "will rise about 25% to $4.9 billion for 2004 and to $5.4 billion in 2005." Plus, sales of Amgen's treatment for rheumatoid arthritis called Enbrel should jump 42% in 2005 to $2.3 billion.

What's more, the biotech firm "has one of the best pipelines in the industry," says S&P. Amgen recently won FDA approval for a drug to quell mouth sores that are a side effect of chemotherapy. And many of its compounds are moving into Phase III testing, including a treatment for osteoporosis, which bodes well for future sales gains.

Despite all the cash Amgen is raking in for its innovative drugs, its shares trade for 21 times the 2005 earnings estimate of $2.90 per share and 1.1 times the long-term estimated profit growth rate of 20%. That's a significant discount to its biotech peers, says S&P, which have an average PEG ratio of 1.5.

Standard & Poor's rates the stock a "strong buy" and sets Amgen's price target at $80, or a 27% possible gain over the next 12 months.

--Elizabeth Frengel

Amgen Click for larger chart Today's quote Use Stock Finder to make your own stock picks Last closing price: $60.00 200-day moving av.: $57 3-yr. annual return: 0% Trailing 12 mo. P/E: 13 Forward P/E: 13 Price-to-book ratio: 3 Price-to-sales ratio: 10.40 5-yr earnings growth: 17% PEG ratio: 0.00 More