Amgen Inc. (NDAQ:AMGN) received a boost from George Putnam's The Turnaround Letter, which called this a great opportunity to buy Amgen stock. The famed turnaround artist explained that a who's who list of value investors, including David Dreman and Bill Miller, have been accumulating the stock and he'd recommend joining them.

Here's an excerpt from the letter:

"Not only are the short-term regulatory issues abating, but more importantly, Amgen has the drug pipeline, the manufacturing capability and the financial resources to remain a leader in providing biotech solutions to the many health problems faced by the graying population across the developed world.

"While there is still a risk that Medicare and private insurers might impose restrictions that would hurt sales of the drugs, those risks are pretty well priced into the stock. Moreover, the physician community appears to favor continued widespread use of these drugs. The company is also reducing costs, which should help offset any loss of revenues from these two drugs.

"Longer term, Amgen's pipeline of products in development – targeting conditions from osteoporosis to diabetes to prostate cancer to Alzheimer's disease – is widely considered to be the strongest in the biotechnology industry.

"Over the last few years, the pipeline has more than doubled in size and become much more diverse. In 2006 the company spent $3.4 billion on research and development, and it is also willing to make acquisitions that boost the drug pipeline.

"For example, in 2006 Amgen spent $2.1 billion to purchase Abgenix, thereby greatly expanding the company's expertise with human monoclonal antibodies. Now Amgen is poised to launch Denosumab, a monoclonal antibody that helps prevent the loss of bone-mineral density, and it is viewed as having the potential to be a revenue blockbuster.

"Another strength of Amgen is its manufacturing capability. Producing biologic drugs is more complex than many other kinds of pharmaceuticals. With nearly $6 billion invested in plants and a highly trained workforce, the company is well positioned to prosper as the industry grows.

"In addition, Amgen has the financial resources, including more than $5 billion in cash, to support all aspects of its business. Today, as in 2000, Wall Street is wondering how fast Amgen will be able to grow in the years ahead. There's a big difference today, though: in 2000, the P/E ratio was as high as 77; now, it's a much more attractive 16."

Overall, this is solid research and a great recommendation to purchase Amgen stock at these low prices. Whether or not the market chooses to follow this advice remains to be seen, but AMGN is definitely a stock worth watching in the meantime!

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Dell Inc. (NDAQ:DELL) shares fell over 13 percent today amid concerns that rising costs from a turnaround would destroy profitability for the computer-maker in future quarters. The company reported better-than-expected earnings growth of 8.5 percent in its third quarter, but said gross profit margins narrowed by 1.4 percent while operating expenses rose 24 percent.

Many analysts are now questioning if Dell's turnaround can succeed at all. It may take more than a year to build a worldwide retail network similar to HPs while it is likely to continue losing market share in the meantime. The company's direct-to-consumer business model has far too little share of the global market to succeed against larger competitors. The server market is also hurting with increased competition from Sun and others.

Dell may now be finding itself in a situation that it cannot fix. The company does not have a broader array of businesses than its competitors. The company no longer has cost advantages when it comes to ordering online or scalability. And it no longer the only computer manufacturer to offer computers online. There is clearly a plethora of issues facing the company that mere cost-cutting and restructuring cannot solve.

Dell's old business model was one that was built atop of a platform with a notoriously low barrier to entry while they focused on competiting on price. That's a battle that very few companies can win. These factors make DELL and interesting stock to watch as investors have very little hope for the company now...

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TXCO Resources Inc. (NDAQ:TXCO) shares rallied recently after an activist hedge fund notified that it would be nominating its own slate of directors for the company's board in order to unlock shareholder value. Shareholders and investors are hoping that this move will help the company capitalize on assets to bring the company's shares to its intrinsic valuation.

Daniel Loeb's Third Point LLC, which owns an 8% stake in the company, indicated in the regulatory filing that they believe the company's stock represents an attractive investment opportunity. Moreover, they contend that the potential value in the company's existing development projects has not been adequately recognized in the market price of the common stock. This could be due to the fact that management lacks the development experience and technical expertise to manage the opportunities presented by those projects.

As a result, the activist hedge fund indicated that it would be nominating its own directors to the company's board during the company's next annual meeting in 2008. Third Points three candidates would constitute half of the company's board and would provide the technical expertise to hire and manage executives capable of capitalizing on the company's existing development projects.

In the end, this is great news for shareholders as it could mean significant share appreciation over the short-term. The stock is also trading at a fundamental discount, which means that it has a little downside protection built-in. Combined, these factors make TXCO a stock worth watching!

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