Biotech leader AbbVie shows steady growth, promise for future
Among well-managed and profitable large-cap biotech companies, AbbVie (NYSE: ABBV) is growing faster than many, posting a strong 7.8 percent increase in revenue year over year in its third quarter. Most important, this growth story is only now starting to kick into high gear.
With the recent approval of its hepatitis C therapy Viekira Pak for genotype 1 patients and a multiyear agreement with Express Scripts granting the drug a favorable reimbursement status on its formulary, AbbVie is set to add billions in revenue to its top line next year.
This deal also shows management’s prowess at capturing market share for new drugs, a feat it perfected with its flagship anti-inflammatory drug Humira. It has delivered several consecutive quarters of double-digit sales growth, making it the world’s best-selling drug in 2013.
AbbVie has three other products generating double-digit sales growth in the third quarter, namely Creon (for pancreatic enzyme therapy), Duodopa (for advanced Parkinson’s disease) and Synagis (a seasonal respiratory vaccine).
AbbVie has a robust clinical pipeline, featuring 12 late-stage clinical candidates, with a handful now under regulatory approval. With a dividend recently yielding 3.1 percent, AbbVie is worth a look. (The Motley Fool owns and recommends shares of Express Scripts.)
Q: Do I lose my whole investment if a company I own stock in goes bankrupt? – C.S., Fulton, Missouri
A: You’ll likely lose a lot, but perhaps not everything. Some companies file for bankruptcy protection and then turn themselves around, as General Motors and Delta Air Lines did. (Others, such as Enron, don’t.) Even a business that fails can still be worth something. Its assets may be sold off, or another company might just buy it entirely.
When these sales occur, as a common-stock shareholder, you are in line to receive some of the proceeds. Unfortunately, though, you’re last in line. Creditors (banks, bondholders, suppliers, etc.) are paid first, followed by preferred-stock holders, and, finally, if anything is left, holders of common stock. (They often receive nothing.)
It’s best to keep up with your holdings and their progress, so that you’re not surprised when there’s trouble. At a minimum, read quarterly or annual reports.
Q: Where can I look up home values in my neighborhood to get an idea of my home’s worth? – L.M., Waldo, Florida
A: For an informed opinion, ask a good real estate agent. You can also find information online, at sites such as Zillow.com, where you’ll be able to look up estimated values of homes in various neighborhoods, prices of recently sold homes and much more.
Be careful, though, if you need a home value estimate in order to price your home or bid on a house. Online data providers can be helpful, but their data isn’t always accurate. If you’re buying or selling a home, it’s often smart to use an experienced agent who might help you land a better price. Learn more at USA.gov and realtor.com.
My dumbest investment
I learned a lesson in pride long ago. Trailers do fall in value! I took out a loan to purchase a trailer. The seller stated that it was for sale as is, and was in excellent condition. After signing a purchase contract, the trailer was rendered not livable after a pipe burst, filling the home with wastewater. I lost well over $13,000, due in part to the park operator not getting a plumber in on time.
Don’t be fooled by the promise of a quick sale. Always get your own inspector. “As is” and “excellent condition” mean very different things. I learned my lessons the hard way. – A reader in Milwaukee
The Fool responds: This is a great lesson for anyone buying anything of value, whether it’s a trailer home, a house, a car or a stock. (Remember that some cold-calling brokers will try to talk you into rushing into dumb stock investments.) Do your due diligence, or have an inspector or other professional do it for you. Money spent on an inspection can be well worth it, saving you from pain and losses.