There are no safe havens in the stock market. Every stock carries risk. But some less than others. This column features stocks that have shown one or more of the following characteristics: less volatility, better earnings, larger market caps, safe and increasing dividends. In these times of turmoil, our goal is to show readers better opportunities for investing with fewer risks.

September 23, 2008 - Amgen Inc. (AMGN-NASDAQ) a biotechnology company, engages in the discovery, development, manufacture, and marketing of human therapeutics based on advances in cellular and molecular biology.

The company has a joint venture with Kirin Holdings Company, Limited, to manufacture and market darbepoetin alfa; a co-promotion agreement with Wyeth for marketing and selling of ENBREL; and Johnson & Johnson to commercialize recombinant human erythropoietin as a human therapeutic. It markets its products to healthcare providers, including physicians or their clinics, dialysis centers, hospitals, and pharmacies primarily in the United States, Europe, and Canada. The company was founded in 1980 and is based in Thousand Oaks, California.

Amgen is a rare biotech company that should appeal to conservative investors. Of course, it's not a new one, trying to discover a magic bullet, with all its research and development funding focused on one cure. Rather, it's a diverse, well capitalized, very large, well established success with almost $12 billion in cash. Value Line gives the company an A++ for financial strength. While there isn't a dividend, the stock has a lot going for it.

The stock's price is up nicely from its April low of $44.96 (a gain of 35%). That reflects investors' hope that Amgen's newest treatment for osteoporosis in post menopausal women will most likely be approved by the FDA. A federal health panel recommended approval to the FDA which will make its own decision and doesn't always follow the panel's recommendation. Look for the announcement between the middle to the end of October. The stock price certainly expects a yes.

If approved, the new drug will help put some positive news out for the company. Two of its current drugs, Enbrel and Aranesp, have recently been subjects of negative comments, based on concerns of safety and health issues. Both represent multi-billion dollar markets, and both have been losing market share. If the new drug (denosumab) is approved by the FDA, it will go a long way to give investors renewed confidence in the stock. Market potential for the new drug is estimated at $3 billion.

Big caveat: if the FDA does not approve denosumab, expect the stock to take a real hit. While many signs point to a positive response from the FDA, there is no such thing as a sure thing when it comes to FDA approvals.

Earnings this year should be $4.88, according to the consensus from 24 analysts. Last year, the tally was $4.55. Next year, consensus is for $5.10, assuming sales of denosumab begin in mid-2010. Quarterly numbers will be out in October and are expected to be $1.26 vs $1.23 last year in the third quarter. For the last quarter, look for $1.25, up from $1.06 last year in the fourth.

More numbers: Revenues this year should be $14.7 billion, down from $15 billion. Next year, expect $15.55 billion. Trailing P/E is 14.44 while the Forward P/E is 12.13. Price to sales is 4.22. Price to book is 2.89. Operating margin for the last 12 months was 38.25% while Profit margin was 30.57%. Return on equity was 22.45%. Cash per share is $11.78. Total debt is $11.47 billion. Debt is 33% of capital. Current ratio is 3.89. Book value per share is $21.04. Beta is a relatively calm .4. There are 1.02 billion shares outstanding. Institutions own 80.50%.

Conservative investors should like the large cash position, the very strong operating and profit margins as well as the low beta. Very conservative investors may want to wait for the FDA announcement before they make the final decision as to whether this stock fits their parameters. However, if the FDA gives the go ahead, look for the stock to advance and hold above these levels. But much of that approval is already in the price.

Company Web site: www.amgen.com

Ted Allrich