We all make mistakes, especially in the investment racket. But one great thing about this business, thanks to a fluid marketplace we often get second, sometimes third, even fourth chances. So, many times, it all works out.

#-ad_banner-#Three years ago I sold all of my positions in AbbVie, Inc. (NYSE: ABBV) shortly after the company was spun off from Abbott Laboratories (NYSE: ABT). I had held Abbott Labs for many years. It was one of the most revered, steady, dividend growers out there. The stock performed consistently in my clients’ portfolios. 

But the company decided to, basically, split in two. Abbott focuses on nutritionals, diagnostics, generic drugs, and medical devices while AbbVie is the research driven pharmaceuticals business. I was used to having all of those things in one bundle and, honestly, I didn’t understand the reasoning for the split or the complexion of the two new companies. I decided it was best to wait till the smoke cleared. So I sold my positions.

Don’t get me wrong, I still made money. But I ended up leaving a lot of money on the table.

Three years is long enough for the smoke to clear and I like what I see from upstart AbbVie.

Currently, the company is ringing the cash register with Humira, an injectable biologic used to treat rheumatoid arthritis (RA). Representing nearly 55% of annual revenues and accounting for more than half of the global prescription market for RA, Humira sales have grown at a solid annual rate of 11% from $7.9 billion to $10.59 billion over the last three years. But the drug has also been approved for multiple uses including chronic conditions such as juvenile idiopathic arthritis, ulcerative colitis, psoriasis, and Crohn’s disease. Safe to say that Humira is a blockbuster which is something we haven’t seen from a big pharma company in quite a while.

But AbbVie is far from a one trick pony. In May, the company acquired Pharmacyclics for $21 billion in order to add the blood cancer treatment Imbruvica to its product portfolio. Imbruvica is co-marketed with Johnson and Johnson (NYSE: JNJ) giving AbbVie access to an experienced sales force for its other blood cancer drug Venetoclax. Imbruvica sales are expected to grow from $1.3 billion this year to $5 billion by 2020. For those of you playing at home, that’s 284%.

Recently, the company received approval for its Hepatitis C drug Viekira Pak which should also help diversify the product portfolio. In addition, the company also has a strong pipeline of 20 compounds in phase two or three development designed to treat a wide array of conditions including multiple sclerosis, Parkinson’s and Alzheimer’s.

All total, 2016 sales are expected to come in at $26.1 billion; a strong 14% increase over last year’s showing of $22.8 billion which was also a 14% bump from the prior year. That’s the kind of pharmaceutical company I want to own.

The strong sales growth AbbVie has delivered has translated, naturally, into strong earnings per share (EPS) growth. 2015 EPS came in at $3.13; a 184% increase over 2014’s results of $1.10. And while 2016 numbers aren’t expected to keep the same pace, results should be nonetheless impressive. Forecasts call for 2016 EPS of $5.03 which would be a more than acceptable increase of 60% year over year.

With revenue and earnings momentum, AbbVie could reach operating margins of over 50% by 2020. While this is an ambitious target, its reachable based on the size, scope and strength of the existing portfolio as well as the product pipeline.

Risks To Consider: The biggest fundamental risk facing AbbVie investors is that 55% of present revenues are generated by Humira. Add to that the drug’s “composition of matter” patent in the United States is set to expire at the end of this year paving the way for competitors and generics. The European equivalent is set for expiration in 2018. While this is a significant development, Humira sales are still expected to grow by 14% this year with emerging market distribution for the drug also increasing. The company seems aware of this as evidenced by their focus on drug acquisition and pipeline development.

Action To Take: As a professional investor, I haven’t seen a big pharma growth story like this in quite a while. It also seems as the market hasn’t heard or understands the story judging by the price of the stock.

ABBV trades around $60 with a cheap forward P/E of 12.2 and at a 15% discount to their 52-week high. Based on the solid revenue and EPS history the company has delivered, a blockbuster drug generating cash, and a promising pipeline, I’m setting a 12-month price target of $80. Factoring in the dividend, the result would be a total return of 35%.

P.S. Most people think you have to sacrifice growth for income. But a Texas baby boomer is holding 23 monthly dividend payers… and has seen her portfolio grow 50%. Get all the details here, including names and ticker symbols.

Disclosure: Adam Fischbaum owns shares of ABBV in client and family portfolios.