Almost every asset class is overbought now, and the few that aren’t — with the exception of one — have good reasons. Utilities and other income proxy stocks that were big in a low interest rate environment are being sold as investors anticipate rate increases for the next two years. One area is dirt cheap, and in some cases pays dividends and has big growth prospects, and that is large cap biotechs.

While pharmaceutical and biotech stocks have wavered some as President Trump has talked about drug pricing, the bottom line is that huge price reductions may take years to come around, and most of the top stocks in the sector have that more than priced in.

We screened the Merrill Lynch research database for large cap biotech stocks that are rated Buy and found four that look extremely attractive now.

Amgen

This biotech giant posted outstanding fourth-quarter earnings, and it remains a top stock for investors to buy. Amgen Inc. (NASDAQ: AMGN) focuses on areas of high unmet medical need and leverages its biologics manufacturing expertise to strive for solutions that improve health outcomes and dramatically improve people’s lives. A biotechnology pioneer since 1980, Amgen has grown to be one of the world’s leading independent biotechnology companies, reaching millions of patients around the world and developing a pipeline of medicines with breakaway potential.

The company’s fourth-quarter results beat on both the top and bottom lines. Merrill Lynch noted in a recent research report:

We are encouraged by the positive topline results of FOURIER which showed significant reduction of cardiovascular risk. Amgen beat consensus on revenues driven by strong sales of Enbrel, Epogen, Aranesp, and Prolia. Revenue guidance was a bit light and earnings guidance bracketed consensus, however we view these estimates as conservative.

Shareholders receive a 2.66% dividend. The Merrill Lynch price target for the stock is $192, while the Wall Street consensus target is $183.88. The shares closed Wednesday at $174.34.

Biogen

Many top analysts are very bullish on this large cap biotech, even though the stock is still down almost 30% from highs printed almost two years ago. Biogen Inc. (NASDAQ: BIIB) discovers, develops and delivers to patients worldwide innovative therapies for the treatment of neurodegenerative diseases, hematologic conditions and autoimmune disorders. Founded in 1978, Biogen is one of the world’s oldest independent biotech companies, and patients worldwide benefit from its leading multiple sclerosis (MS) and innovative hemophilia therapies.

The company’s core MS drug market is facing challenges going forward, with most diagnosed patients now treated, payers limiting net benefits from price increases and competing entrants expected. With those issues in mind, the analysts are still positive on Tysabri, especially for secondary-progressive MS, with upcoming clinical data a big factor.

Top analysts also feel that a combination of cost reductions in tandem with the still strong MS franchise, which may not be as challenged by competitors as some on Wall Street think, can help the company beat earnings estimates this year. With a strong pipeline, the stock is a solid choice for aggressive growth investors. Toss in some rumors of a possible buyout, and Biogen makes even more sense.

The $343 Merrill Lynch price target compares with the consensus target of $321.72. Shares closed most recently at $287.94.

Celgene

This top large cap pick has big upside potential. Celgene Corp. (NASDAQ: CELG) has an outstanding partnered pipeline, which most think is low risk and has the potential to yield several blockbuster drugs. Certain Wall Street analysts also think the company can grow earnings 15% on a compounded annual growth rate basis going forward. Otezla, which treats psoriasis and psoriatic arthritis, had achieved considerable prescriptions among physicians, but the scripts have slowed after a solid launch, showing the importance for sales outside of the United States.

Celgene’s blockbuster blood cancer drug Revlimid continues to dominate. Pomalyst sales also continue to be solid. Cancer drug Abraxane is also growing at a respectable rate, so the company continues to have a strong lineup of top-selling drugs. Wall Street analysts have noted that the company has discussed at its recent conference the benefits of longer duration Revlimid.

Celgene has a very compelling pipeline, and with four existing Phase 3 trial assets, that may add strong new drugs and revenue prior to the end of the decade.

The U.S. Food and Drug Administration (FDA) has just approved Revlimid as a maintenance treatment in patients with newly diagnosed multiple myeloma after receiving an autologous stem-cell transplant. While not a huge outcome, another treatment use for the drug is a positive.

Merrill Lynch has a $138 price target, but the consensus target is $140.33 Shares closed Wednesday at $120.52.

Regeneron Pharmaceuticals

This stock remains one of the favorites among portfolio managers and is one of the top Merrill Lynch picks for 2017. Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) has been a performance monster over the past two years, and most Wall Street firms expect it to stay one. The company is focused on the development of therapeutic human antibodies for the treatment of eye disorders, hypercholesterolemia, cancer, inflammation and other diseases.

Regeneron’s product sales are driven principally by its VEGF inhibitor Eylea, which is approved for use in wet age-related macular degeneration and diabetic macular edema, and by Praluent for the treatment of hypercholesterolemia.

The analysts have noted in the past the company’s promising pipeline updates with multiple Phase 3 assets in allergic diseases and potentially pivotal studies in immuno-oncology.

The Merrill Lynch price target is a massive $502. The consensus price target is $434.77, and shares closed Wednesday at $371.85. So the upside to the Merrill Lynch target is over 30%.

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These are four of the biggest players in biotechnology, and all are very cheap compared to the rest of the market. While certainly not appropriate for conservative accounts, they do make sense for long-term growth accounts that have some risk tolerance.

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