Rayno Biopharmaceutical Portfolio Update: Buy and Hold is the Key…Update-2

Update 11/8/17 …Per comments on Monday. Celgene (CELG) technicals are holding at $102-103 so we will add CELG to the Rayno Portfolio at a price of ~$102.5. The stock was battered on earnings news so we see good value and potential for long term growth. Forward PE is 11.74, Price/Sales is 6.33. Risk is balance sheet. If price drops below $98 sell. Details to follow.

CELG Celgene Corporation daily Stock Chart

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Rayno Biopharmaceutical Portfolio Poised for Big Wins in 2017

Biotech stocks have stalled since hitting highs in early October with pronounced weakness (see Risks Rising) over the past two weeks. Some large caps took a big hit from disappointing earnings ( AMGN, GILD) so this points out the need for a balanced diversified portfolio including ETFs.  Today was another lackluster day in a mixed market but with major indices holding the 5 day level.

Our biopharmaceutical portfolio is designed for the longer term but we will delete stock picks that no longer meets our criteria. We do not give calls on trades or when to sell stocks in the portfolio.

The Rayno Biopharmaceutical Portfolio has done very well in 2017 and here is a brief performance summary as of 11/6/17:

Company Ticker Date Price Price Perf 11/6 Perf %  Div
Started 4/25 % P YTD
Abbvie ABBV 2/3/16 56.5 65.45 16 93 41.48  3
Amgen AMGN 9/12/16 172 165 -4 170.8 16.8  2.65
Biogen BIIB 2/13/17 275 286.5 4.5 315.47 11.25
bluebird bio BLUE 2/3/16 43.75 88.1 103 144.75 134.6
Bristol Myers BMY 2/16/16 61 54.2 -7.7 61.68 5.54  2.52
Foundation Med FMI 7/5/16 20.4 34 68 54.35 207
Gilead Sciences GILD 2/3/16 85.8 67.3 -20.9 72.38 1  2.84
Roche ADR RHHBY 4/4/16 30.36 32.4 7.9 29.22 2.4  3.56
IBB 6/29/16 250 296 18.4 315.6 18.9  wait
XBI 1/31/17 64 70.7 9.4 85 43.66  trade
QQQ (reference) n/a 135.13 n/a 153.79 29.8
FBIOX (reference)
220 27.25
 Celgene   CELG  11/8/17  102  new

Some key points on Rayno Portfolio performance:

  • Top winners are more speculative stocks Foundation Medicine (FMI) up 207% and bluebird bio (BLUE) up 134% and smaller cap driven XBI up 43.66%.
  • XBI is our preferred trade for overweighting. We sold near $87 as the stock pulled back from $89 but has since recovered to the $85 level.
  • Our large cap winner was Abbvie (ABBV) close to its all time high of $93.58 with strong earnings driven by Humira.
  • Gilead Sciences (GILD) made a huge recovery from the $65 level but fizzled on their earnings with disappointing top line growth.The Company recently bought Kite Pharma a leading CART-T drug developer.
  • Rotation out of healthcare to technology has also been a factor lately as technology and “FANG” stocks lead the market.
  • Bull market intact but weakness in IBB now at $311 is a concern.

After the recent correction and anticipating a seasonally strong Q4 we bought Celgene (CELG) at $100 which was down from 2017 highs of about $145. If technicals hold we will add CELG to our portfolio.

Disclosure: long ABBV, CELG, GILD, RHHBY.

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