Recent positive news on phase III denosumab is a big reason we continue to be positive on Amgen. The ESA trends are stabilizing, but it will still take a few more quarters to see exactly how the ODAC meeting and finalized label will affect sales. In the meantime, investors should focus their time on just how big denosumab and motesanib can be, because they are the next wave of potential growth.

Amgen is still an enormously profitable company generating significant cash flow over $1.5 billion in the second quarter alone. Our DCF analysis shows fair value in the mid $60s.

The stock had a huge run-up after the pivotal phase III denosumab data and the solid second quarter earnings. We do not believe the big run continues, and thus are not yet ready to upgrade the shares.

Amgen's earnings have a tendency to bounce between quarters, significantly beating one quarter and then disappointing the next. We see fair value at $66 or 14x our forward twelve month 2008 EPS of $4.42. We see 2008 EPS at $4.37, in-line with the management's updated guidance of $4.25 to $4.45.

Comstock Can Be Counted On

We are reiterating our Buy rating on Comstock Resources, Inc. (CRK) shares following the Bois d'Arc divestiture. This transaction is expected to streamline Comstock's operations and position it as a pure-play onshore natural gas producer.

We continue to like the company for its growing volumes (first-half 2008 volumes were up 43%) and attractive valuation. The Haynesville Shale play offers significant long-term reserve-add potential, going forward. Comstock's drilling success in the Cotton Valley formation is another catalyst for future production growth.

Comstock has a positive production growth profile and volumes are expected to grow approximately 25% to 30% this year. The company is successfully executing its strategy, as is evident from its strong production growth and effective controls year-to-date.

The sale of Comstock's offshore operations will allow the company to streamline its operations and function as a pure-play onshore natural gas producer. The company's balance sheet is improving the company's debt-to-capitalization is expected to be approximately 17% following the sale of Bois d'Arc.

Comstock will spend $410 million this year on exploration and development activities, drilling approximately 133 onshore wells. Of this year's budget, the East Texas/North Louisiana operating region accounts for $292 million (71% of the 2008 budget) to drill 101 wells. The company expects to spend $111 million in the South Texas region to drill 24 wells and $7 million to drill five wells in other regions.

CF Industries Keeps It Growing

CF Industries Holdings, Inc. (CF) has leading market shares in many key fertilizers. Strong domestic and international grain markets have produced an exceptionally high global demand for fertilizer, translating into substantially higher selling prices for all the products.

The company is optimistic about its phosphate business where the market is expected to remain tight near term due to healthy offshore demand growth in India and Brazil as well as higher application rates in the U.S. This is likely to lead to higher prices and cash margins for various fertilizers.

In addition, the company is likely to benefit from the proposed nitrogen facility in Peru, which will address the nitrogen demand on the west coast of Central and South America as well as Mexico, which does not have a nitrogen facility. As a result, we rate the shares a Buy with a target of $130.

On July 28, CF Industries Holdings reported net earnings of $5.02 per diluted share for the second quarter of 2008 versus $1.65 for the same quarter a year ago. The sharp increase was primarily driven by higher nitrogen and phosphate prices. Net sales totaled $1.16 billion, up 37% from the year-earlier quarter.