Rayno Biopharmaceutical Portfolio Update- Biotechs with Upside Opportunity

Caution No Rush to “Load Up” in a Bear Market

Since Mid-January all of our previous portfolios were placed on hold and we recommended four new positions as long term holds. Here are initial prices and the current performance:

Abbvie (ABBV) Started at $56.49 now at $56.96

bluebird bio (BLUE) Started at $43.75 now at $40.26

Bristol-Myers Squibb (BMY) Started at $61 now at $63.26

Gilead Sciences (GILD) Started at  $85.80 now at $92.14

For trades and portfolio overweighting i.e. add risk use XBI long now at $50.49.

bluebird bio (BLUE) is a volatile speculative stock focused in gene therapy for rare and genetic diseases. One months trading range is $40-55! Clinical data will be presented at the AAN Meeting on April 20 for their lentiviral-based gene therapy called Lenti-D.

This would be a good time to find new positions for 2016 gains with an emphasis on larger caps. We are updating financial metrics for large cap biopharma as we get through Q1 earnings reports. Most large caps are still down YTD primarily due to concerns about growth and pricing issues. Our picks assume modest growth potential with the added safety of a dividend. Our assumptions overall for biotech stocks are as follows:

  • As tracked by the IBB and the more speculative XBI  below the February 11 bottom has held.
  • Despite weakness in biotech and healthcare overall relative to the market, earnings and clinical news can provide upside catalysts.
  • Smaller caps show good trading opportunities. Look at ACAD.
  • Dividends provide relative safety.
  • Technicals rule until Q1 earnings provide guidance.

Disclosure: long ABBV,BLUE,BMY,GILD.

XBI SPDR S&P Biotech ETF daily Stock Chart



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