Amgen’s been dropping and I keep buying, but I’m nearing a full stomach on the biotech.

I used the proceeds from last week’s sale of Merck to buy Amgen, and after this latest buy ($56.06), I’m pretty much at my max position on Amgen (AMGN – $56.06).

Amgen (AMGN) has been selling off after an FDA panel recommended stronger warning labels and further clinical studies on its Aranesp drug. But any short term bad news from this is already in the stock. And Wall Street loves to sell off stocks with short term bad news while they ignore the long term picture. Amgen is still in a good industry with good long term prospects. And while I think the industry needs some regulation, Democrats are not the threat to pharma research that many managers seem to think.

So why do I still like the prospects? The P/E ratio of around 14 versus long term earnings prospects make the stock cheap. Either check my last blog on Amgen (Here I am buying the Amgen at $64 in February) or see the recent case for made by Alex Garcia at ValueInvesting Forum.

Post note: Amgen fell after the close on news that Medicare might limit payments on the drug.

Disclosure: I own Amgen. I have been accumulating Amgen since January.

Disclaimer: Nothing in this trade log is meant to be specific financial advice or a recommendation to buy or sell. I do not give investment advice. Do your own research. Do not rely on anything in this weblog to make investment decisions. I do not log all my trades here. I only describe or mention those that I think might be interesting. Consult an investment professional familiar with your specific financial situation before buying or selling any security. Options may be for me but they are are not for everyone. Futures are highly speculative. You can lose more than your initial investment in futures.

Photo: evill1, Creative Commons, Flickr