Our 24/7 Wall St. research team did some digging, and we came up with a statistic you won’t find hard to believe. The current bearish sentiment numbers from American Association of Individual Investors stand at 45.53%. That is up from 36.26% on January 7 and is the highest reading since 2013. That means that almost half of all investors are bearish, and the day-to-day negative tape sure indicates that. While the gut reaction is to sell, the right thing to do now is to start to nibble and buy.
The Wall Street firms we cover are well aware of investor anxiety, yet they, unlike financial media talking heads, realize investors can’t just go to cash with a snap of their fingers. A recent Jefferies research note had some solid growth stock buys for investors looking to test the waters some. We found four that make good sense now, and all are rate Buy.
This is one of the top global pharmaceutical stocks at Jefferies and is also on the Franchise Stock Picks list. AbbVie Inc. (NYSE: ABBV) is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. The company’s mission is to use its expertise, dedicated people and unique approach to innovation to develop and market advanced therapies that address some of the world’s most complex and serious diseases. AbbVie employs more than 26,000 people worldwide and markets medicines in more than 170 countries.
The stock fell 10% in late October after an FDA warning about liver risk with the company’s hepatitis C (HCV) products. However, Jefferies points out that this applies to a small sub-population of cirrhotics who are 5% or less of the total patient population. Additionally, the next generation HCV product could be launched as early as 2017, and even of the entire Viekira Pak/Technivie business were lost over the next two years, it represents only 4% of net percentage value. The company announced last week that the supplemental New Drug Application (sNDA) for Viekira Pak to be used without ribavirin (RBV) has been accepted by the FDA with priority review.
For the third quarter, AbbVie reported a profit of $1.24 billion, a significant increase from the $506 million it earned in the same quarter of 2014. The company’s sales increased by 8.40% year over year to $5.94 billion.
AbbVie announced last week that the U.S. Patent officials denied a challenge by Amgen over AbbVie’s Humira formulation patents. Jefferies also feels that the likelihood of success in gaining a preliminary injunction to prevent Amgen’s Humira biosimilar from reaching the U.S. market is now almost 100%. The firm expects this to delay other biosimilars entering the U.S. market for up to 2.5 years.
AbbVie investors receive an outstanding 4% dividend. The Jefferies price target for the stock is $85, among the highest on Wall Street. The Thomson/First Call consensus target is $73.13. Shares closed Thursday at $58.36.