Busted Biotechs Week ending 3/18/16: The Only Good News Could Be Holding the February Bottom…Update 3/22

3/22/16…Update

Biotech Rally Enters Fourth Day-Green Screen

XBI up 7.34% Over Five Days to $52.49

Our new picks were up today: ABBV,BLUE, BMY,GILD.

But Gilead Sciences (GILD) was down after hours as Merck (MRK) HCV patents were found valid in dispute. A jury will decide how much Gilead owes to Merck.

Busted Biotechs are Still Lagging the Market

There is very little do with biotech stocks especially now that other sectors are outperforming. Here is the sector performance over the past month and since the February 11 bottom:

  • IBB one month down 4% with 240-270 channel intact. Large cap focus.
  • XBI one month down 0.94% in middle of 47-54 channel. Smaller cap focus.
  • XLV one month up 1.38% more stable with 66-68 channel intact. Broader health care ETF.

During the same one month period the market has rallied 4 straight weeks off the February 11th bottom despite a lot of “gloomsayers” on the macro front. The S&P is up 6.87% over one month. Many sectors are green YTD like energy up 8.17% and basic materials up 10.35% YTD.

  • The NASDAQ Composite is up 6.47% over one month and the QQQ is up 5.65%. The QQQ has several large cap biotech stocks in it.
  • The DJI is a leader up 7.38% over one month as Large cap industrial and consumer stocks rallied.

And here is an update of Eight Top Large Cap Biotech companies which we have tracked since the 2016 J.P.Morgan Healthcare Conference. Data is from FinViz.com but only the latest prices have been updated. The financial metrics will be updated after Q1 earnings.

Company Ticker Price Market 2015 P/S PEG Q/Q Rev Q/Q EPS Stock Perf Price 1/18 % Week Price 3/18 %YTD
1/7/2016 Cap $B Rev$B Gr% Gr% %12 mos 2016 JPM 2016
2/15/2016
Abbvie ABBV 57.21 85.96 22.86 3.76 0.91 17.4 282.4 -9.49 57.32 0 56.57 -4.51
Alexion ALXN 174.37 31.79 2.6 12.21 8.85 16.9 -61.8 -22.59 158.68 -9 128.45 -32.66
Amgen AMGN 152.98 109.17 21.66 5.04 1.99 3.8 41.9 -5.71 151.35 -1 145.51 -10.36
Biogen BIIB 284.01 54.06 10.76 5.02 1.72 7.5 0.8 -36.88 273.33 -3.76 250.78 -18.14
Bristol Myers BMY 65.27 100.43 16.56 6.06 3.11 0.7 0 -0.27 62.78 -3.8 62.7 -8.66
Celgene CELG 111.89 80.08 9.26 8.65 2.32 22.9 -6.8 -11.59 103.06 -7.89 98.76 -17.54
Gilead Sci GILD 96.25 128.9 32.64 3.95 1.41 16.3 45.9 -12.23 91.84 -4.58 90.27 -10.79
Regeneron REGN 501.96 39.72 4.1 9.68 3.47 36.9 38.1 -5.81 462.95 -7.76 364.51 -32.86
IBB 304 6.1 -22.34 284.18 -5.93 251.19 -25.71
XBI 61.82 1.55 -30.6 47.05 -29.27
FBIOX -33.2 157.78 -31.64

Rayno Life Science New Picks

On February 3 we recommended only 3 new stocks that looked like buys for the longer term. We are still in the process of rebalancing out portfolios and have been bearish since early January.

New picks are : ABBV at $56.49, GILD at $85.50, and a more speculative trade bluebird bio (BLUE) at $43.75. We later added Bristol-Myers Squibb (BMY) at a price of $59-61. ABBV, BMY, GILD pay dividends.

We will take a look at Diagnostics and Tools this month as there may be some good value for the long-term such as Illumina (ILMN) the leader in DNA gene-sequencing now down 21.73% YTD, but a more stable stock over the past month. Five year earnings growth for Illumina is 28%, but with a high PEG of 2.78 and a P/S of 9.78. Here is our 2015 DX and Tools Portfolio which has not been updated since December 2, 2015. Most of these stocks are down YTD but Alere (ALR) is up 27.65% because of its $5.8B acquisition by Abbott (ABT).

Disclosure: Long ABBV, BLUE, GILD, XBI.

 

XBI SPDR S&P Biotech ETF daily Stock Chart

 

 

 

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