Biotech Sector (IBB $119.73) Up 12 % YTD, Lagging NASDAQ (QQQ) Up 17.85%
Here is a summary of our recommendations over the past month:
- No change in our basic Rayno Life Science Portfolios.Biopharmaceuticals have outperformed Tools and Diagnostics. Continued strength with following stocks at or near new highs are : Amgen (AMGN $68.43), Biogen (BIIB $121.17)),Cubist (CBST $43.70), Exact Sciences(EXAS $9.95), Regeneron (REGN (110.75)
- More caution on adding new positions, particularly small and mid-cap speculative biopharma stocks with no revenues. Momentum has slowed after huge gains.
- Technology is gaining strength compared to biotech so the QQQ’s are favored for traders . The NASDAQ-100 (QQQ) has good weighting of large cap biotech e.g. ALXN, AMGN, BIIB,GILD. The QQQ has hit new highs while the IBB at $119+ is below its high in the $122 range and flat since early February. Volume is lagging in March for IBB compared to February. Apple (AAPL) of course helps the QQQ.
- We added a genetic testing value play Response Genetics ( RGDX $2.00) at $1.50. One of our Dx focus stocks SeraCare (SRLS $3.96) is being acquired for a 44% profit.
Mid-Cap biopharma stocks are relatively weak, flat for the day with considerable volatility among winners and losers. The financing window is open for biotechnology stocks with revenues or clinical stage products and over the past week Alkermes (ALKS), Amylin (AMLN), Jazz (JAZZ) and XOMA (XOMA) announced shelf offerings. Expect more offerings (see Medivation) while the market is hot and prices are high
A more defensive play in healthcare the XLV ($36.78) is near its 52 week high, yields 1.88% and has among its holdings large cap pharma and biotechs as well as some medtechs.Up 4.3% YTD.