FED Fear Factor Fades then Biotechs Rally: AMGN,IBB…Update-1 Bearish Reversal

Update-1… 9/13… Hard to Call Next Move: Macro and i Rates Rule

The market was rattled at the opening with the IEA news on cuts in the demand forecast for crude which dropped 2.33%. Subsequently FED hike fears returned causing more volatility with stocks and significantly a major move up in the Ten Year Treasury Yield to 1.73%. NASDAQ rallied briefly at mid-day closing down 1.08%. Concerns about global growth resumed. Further weakness in the bond market will cause concern for stocks.

  • IBB Holds intermediate support-IBB above 280 closing at $282.62.
  • Red screen day in biotech with few winners-AGIO,ARIA,CLVS etc
  • Still expect higher prices in biotech sector by year-end.

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Biotech and Healthcare Sectors Surge 

Green Screen Day

All of our current picks were up today: Abbvie (ABBV) up 1.12%, bluebird bio (BLUE) up 10% , Bristol Myers (BMY) up 1.17%, Foundation Medicine (FMI) up 2.95%, Gilead Sciences (GILD) up 1.07%, IBB up 3.04% and Roche ADR (RHHBY) up 1.08%.

We are adding Amgen, Inc. (AMGN) to our portfolio today at a price of $172-173. Amgen (AMGN) has one of the lower PEs among the large caps, is less volatile (stock is up 5.98% YTD) and pays a 2.33% dividend. The stock was up 3.3% today with good accumulation.The PEG is not great at 2.22 but the trends are improving particularly the Q/Q EPS growth of 14.9% and P/S of 5.88. Amgen (AMGN) has a broad product line in oncology/hematology,inflammation, bone health and nephrology with Sales of $22.47B. AMGN is a dividend play with low volatility and strong financials.

All large cap biopharmaceuticals were reviewed after Q2 earnings in this post. Valuations are not great but growth potential is there. All of our large cap biopharma picks pay a dividend.

Risk is off

Disclosure long: ABBV,BLUE,BMY,FBIOX, FMI,GILD,RHHBY

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