The life science sector roared ahead again today helped by a 1% move in NASDAQ now at YTD highs up 21%. With an earlier post last week we urged “staying the course” with our portfolio stocks and many of them have made huge moves.This week we attended a diagnostic and tools trade show the buy modafinil canada AACC and we will report later this week on companies and technologies to watch. Also many diagnostic companies have reported earnings and selected Rayno stocks have made significant moves over 5 days: Alere (ALR $34.25) up 18%, Hologic (HOLX $23.07) up 1.93%, Qiagen (QGEN $21.40) up 3.2%,and Sequenom (SQNM $3) down 9%. Over the past month selected Rayno stocks have been strong:
Alere (ALR $34.25) up 37%, Illumina (ILMN $80) up 4.84%, ThermoFisher (TMO $92.10) up 6.45% and Response Genetics (RGDX $2.08) up 37%.
Biopharmaceutical stocks are rockin’ in a new leg upward: Alexion (ALXN $117), Array (ARRY $6.89), Cubist( CBST $64.72), and Pharmacyclics (PCYC $113.61) and Seattle Genetics (SGEN $41.67). Momentum has returned to biotech stocks with only a brief rest in June. Stashes of cheap money are going back to work.
Here is our mid-summer take on the life science sector, where corrections and lulls are short lived:
- Volatility is increasing day to day, month to month, within the upward channel. This is becoming a great market for day traders and momentum types. Stocks with high short positions are being squeezed by funds and trigger covering.
- With only a few exceptions all Rayno Portfolio positions look like strong holds. Use ETFs and FBIOX for core weightings.
- Within the biopharmaceutical sector there is more action in mid-caps as funds need to find new stocks. Large caps like Amgen (AMGN), Biogen (BIIB), and Regeneron (REGN) are over-owned.
- Diagnostic stocks earnings have been mixed and competitive back-drop is changing. Many stocks are at new highs so revenue growth is key (more on this later). DX stocks are riding the coat-tails of the life science ebullience and apparent synergies between DX and RX.
- Stay long but with a 10% cash position.
Pundits and big bond managers are still saying that a major re-allocation of bonds into equities has not yet occurred so there is fuel for a Q4 rally if the macro news is still good. Moreover retail investors are still gun shy , a good sign.