NEW YORK (CNN/Money) - Nokia's disappointing sales announcement and the resulting fallout in the tech sector makes a lot of nervous investors even jumpier. In particular, they fear that any earnings disappointments during the next few weeks may lead to sudden selloffs.

But while caution is justified -- particularly in growth sectors -- it's a mistake to turn bearish or to begin frantically reshuffling your portfolio. Corrections occur in almost every bull market. And although professional traders may try to profit from them, individual investors are best advised just to ride them out.

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It is, however, valid to avoid stocks with high-expectations built into their prices (as was the case with Nokia). But even among growth stocks, you can find a few companies that are still underestimated by investors.

Amgen looks like just such a stock. The largest biotech with sales in excess of $8 billion is undergoing a transformation -- from a narrow to a more diverse company -- that is not fully reflected in its valuation.

Amgen has long been one of the few consistently profitable companies in biotech. But for two decades, its success rested on only two drugs -- Epogen, for the treatment of anemia associated with chronic kidney failure among dialysis patients, and Neupogen, for the prevention of infection in cancer patients undergoing certain types of chemotherapy.

Because Amgen's product line has long been so narrow, the company's shares never received the kind of valuation its growth deserved. Over the past decade, for instance, earnings and cash flow have grown at a 28 percent compound annual rate, as sales have increased at a 24 percent rate.

Finally, in 2001 the company began to diversify with the launch of Aranesp, another treatment for anemia. That was followed in 2002 with Neulasta, an alternative to Neupogen. Both these drugs were similar to Amgen's traditional products.

Acquisition turned out to be the secret to more significant diversification. In 2001, Amgen announced it would buy Immunex for $16 billion, thereby gaining part-ownership of Enbrel, a successful treatment for rheumatoid arthritis (Wyeth Pharmaceuticals also has part-ownership of this drug).

Currently, five major products account for virtually all of Amgen's sales. But the company has two more drugs in late-stage clinical trials and 11 others in mid-stage trials.

Last week's announcement that Amgen would pay $1.3 billion for Tularik, a small San Francisco biotech, is an important advance in this strategy of diversification. The acquisition will add five new candidates to Amgen's pipeline.

At some point within the next decade, Amgen will transition from being a narrow biotech to one of the fastest growing diversified pharmaceuticals manufacturers.

The stock's valuation, however, doesn't seem to reflect this. Amgen's P/E is only about one-third of rival Genentech's. Moreover, Amgen's 50 percent premium over Pfizer seems quite modest, considering the enormous difference in their growth rates.

At $59 a share, Amgen (AMGN: Research, Estimates) trades at 25 times estimated earnings for 2004 and is projected to grow at a 21 percent compound annual rate over the next five years. Pfizer, with 13 percent growth and a 1.8 percent yield, trades at a 17 P/E.

Pfizer (PFE: Research, Estimates), the largest drug company, remains a solid core holding for long-term growth investors. But if you believe that Amgen will successfully complete its transition, five years from now it will be a more dynamic rival.

Michael Sivy is an editor-at-large for MONEY magazine. Sign up for free e-mail delivery every Monday and Thursday of Sivy on Stocks.