Biotech Stocks Lag and Remain Stuck in a Trading Range
IBB at $268 up 1% NASDAQ up 0.23% at 4703 S&P up 0.41% at 1986
Biotech stocks are trying to rally after a scary downdraft Monday when the IBB dropped more than 2%. Over five days the IBB is up 2.4% compared to 4.13% for the NASDAQ-100 (QQQ). However the IBB is still one of the worse sectors YTD down over 20%, when even the trashed energy sector XLE is down only 1.38% after today’s move up. Energy and materials led the market today up over 2%. According to some pundits and analysts biotechnology and healthcare stocks are still under political assault for pricing issues and that may be cause for caution especially when other sectors are moving up.
We are in the process for reviewing our Life Science Portfolios and recommended several new buys on February 3 since the severe correction which began in mid-January. Here is the performance of those stocks as well as Bristol-Myers Squibb (BMY) which was recommended on 2/16.
Stock Ticker Recommended Price % Performance
Abbvie (ABBV) $56.49 Now $55.70 (1.4)
Bluebird Bio (BLUE) $43.75 Now $53.86 23.1
Bristol-Myers Squibb (BMY) $61 Now $64.90 6.4
Gilead Sciences (GILD) $85.80 Now $88.80 3.5
BLUE is a speculative and volatile stock in gene therapy, gene editing and CAR-T and has a partnership with Celgene (CELG). The other three stocks pay dividends.
In addition we suggested that investors buy large cap biopharmaceuticals for the long term and avoid smaller caps unless they are frequent traders. XBI would also be a good short term trading vehicle for more volatile small caps. Trading has been lively with 10% moves over 3 days quite common as these stocks are near their lows.
Many of the favored large cap biopharmaceutical stocks are still struggling YTD including some of our original picks: ALXN down 21%, AMGN down 9.7%, BIIB down 11.5%, CELG down 13%, REGN down 24% and RHHBY down 6.8%. Stocks in bold are beating the IBB and the Fidelity Select Biotechnology Portfolio (FBIOX).
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