Best Biotech Trades of 2020. We were on vacation over the past week and that combined with all the crazy mob news from the Capitol combined with the worsening pandemic makes it hard to focus . Nonetheless stocks are booming and many financial writers and analysts feel there is room for optimism . We are in the midst of a sector rotation so I’ve been spending more time and money on areas outside healthcare while keeping my core biotech stocks intact. Lets me start by giving a brief summary of the market and our model healthcare portfolio.Amidst the turmoil of the past week we have a market that finds a way to renew itself with the most optimistic scenarios.The DOW was up 1.61%, the S&P up 1.83% and the NASDAQ up 2.43%.
Energy stocks were up over 9% this past week and financials rose 2.4% showing the trend toward portfolio rotation or “re-opening’ trade .Bank earnings are slated for next week.
Most ETFs in healthcare and biotechs are at or near one year highs.
| PORTFOLIO | |||||||||||
| Stock/ETF | Ticker | Price | Weight | P 11/13 | P 11/27 | %Perf | Price | QTR | 2020 Yr | Price | |
| 10/25 | 1 mo. | 12/31 | % | % Perf | 1/10/21 | ||||||
| iShares NAZ Bio | IBB | 136 | 25 | 141.06 | 143.22 | 2.27 | 151.5 | 11.9 | 25.7 | 158.23 | |
| iShares Russell 2k | IWM | 163 | 10 | 173.51 | 184.37 | 16.56 | 196.4 | 30.9 | 18.3 | 207.72 | |
| Merck | MRK | 80 | 10 | 81.09 | 79.86 | 2.4 | 81.77 | -1.39 | -10 | 83.03 | |
| United Health | UNH | 330 | 25 | 355.67 | 337.94 | 5.44 | 350.7 | 12.5 | 19.3 | 363.39 | |
| SPDR S&P Bio | XBI | 117 | 5 | 125.04 | 131.46 | 11.95 | 140.8 | 26.3 | 48 | 149.54 | |
| Healthcare SPDR | XLV | 108 | 25 | 112.12 | 109.44 | 3.35 | 113.4 | 7.55 | 11.4 | 117.39 | |
Despite the J.P.Morgan Healthcare Conference in a virtual mode this week we will still get earnings updates, deals , guidance and clinical news so the two weeks should be very active for traders. Here is a brief summary of our calls and trades over the past year.
Although we have made money in COVID vaccine trades on the long and short side with AZN, BNTX, NVAX and MRNA we generally avoided taking any substantial positions and missed the trade in MRNA.
We maintained a core position in several large cap biopharmas and reiterated buys: ABBV, BMY, RHBBY, MRK and if you prefer the IBB. But we missed the big move in ALXN and are still waiting for GILD to perk up. We covered biotech and healthcare ETFs extensively and how to play them.
Small Caps were big winners with the IWM up 70% to $208.
The Russell 2000 and other small cap indices and ETFs have a lot of biotech positions. Over the past week it was up 5.91%! Small cap life science stocks took off in Q4 and we made several great calls and good trades. We urged investors to get into gene therapy stocks and had one huge winner that we covered from the JPM Conference last year: Editas Medicine (EDIT) up 192% for one year at $90.6.
Pacific Biosciences (PACB) has been on our coverage for many years and patience paid off in 2020/21 with a one year gain of 326% to the $36 handle!
Glaukos (GKOS) made a nice comeback and Teledoc Health (TDOC) looks strong-update coming.
We provided timely coverage of Coronavirus plays and many diagnostics stocks were big winners like Genmark Diagnostics (GNMK) another four bagger at $16.63! Other big winners in 2020 were DHR, NSTG ,QDEL, TMO, VCYT all companies covered by us in past years but alas not owned now.
Our current core holdings favor the following Life Science and MedTech funds: FBIOX, FSMEX and PRHSX.
And of course our favorite bull trade is the XBI, quite volatile but up 84% over one year.
A big week lies ahead with a catch-up challenge for COVID vaccines with only 6M administered out of 21M units shipped. Economic data is coming as well. Despite the political turmoil the market should be buoyed by additional stimulus. But with all this momentum a 10% correction is expected if not this month in February.
(sorry for typos and WORDPRESS related errors)