Is Amgen Stock Fully Valued After A 17% Rise In A Month?

Amgen stock (NASDAQ
NDAQ
: AMGN) has seen a 17% rise in a month, outperforming the broader S&P500 index, up 1%. The recent rise can be attributed to its upbeat Q2 results. The company reported revenues of $7.0 billion, up 6% y-o-y, faring better than the consensus estimate of $6.7 billion. Also, its bottom line of $5.00 on a per share and adjusted basis was comfortably above the $4.46 consensus estimate. Adjusted operating margin contracted about 50 bps to 52.6% in the quarter, partly due to higher R&D costs.

Interestingly, AMGN stock had a Sharpe Ratio of 0.4 since early 2017, which is lower than 0.6 for the S&P 500 Index over the same period. This compares with the Sharpe of 1.2 for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.