Large Cap Biopharma Stocks: Performance and Valuations for 2019.
In 2019 the IBB was a less risky pick for a biopharma portfolio; ABBV and BMY look good.
Merck (MRK) and Vertex (VRTX) were the top winners since 1/15/18.
There was a severe correction in biopharma stocks two weeks ago so these valuations are quite good considering that peak values on the large cap focused IBB was 4/5 and trough values were 4/22.Biotech and healthcare stocks rallied Thursday and Friday of last week.Although the IBB underperformed the NASDAQ-100 (QQQ) up 27.25% in 2019, considering the correction, the performance YTD up 10% was not bad. The healthcare sector lagged many sectors in 2019 up only 5.6%.
We will update the valuation grid after all earnings come in next week: GILD, MRK, VRTX and REGN reports May 7.
Some takeaways:
- The small cap equal weight XBI continued to outperform the IBB because the stock holdings are less earnings dependent and have top line growth plus M&A potential.
- Over 52 weeks the leaders are CELG,MRK and Roche (RHHBY) -not in matrix.
- The 52 week laggards are BIIB, ABBV and BMY.
- Some favorite stocks by analysts are: ALXN, MRK and VRTX.
- Valuations measured by P/S and Fwd PE favor ABBV, BIIB, CELG and GILD.
- Stock picking among the large caps can be challenging because BIIB, ABBV and REGN were losers. It would be better to split your positions 50/50 IBB and XBI.
Look at Abbvie (ABBV) as a contrary value pick (YTD loser) with high yield and Bristol Myers (BMY) as a Celgene (CELG) play after dust settles on merger.
Disclosure: long ABBV, BMY, RHBBY, GILD, MRK.
COMPANY | Ticker | Price | 2017 | Price | Price | MCap |
% Perform
|
||||
1/15/18 | Rev$B | 12/18 | 4/27/19 | 2019 | 2019 | FWD | Analyst | % | |||
$B | YTD | P/S | PE | Recom | Div | ||||||
Abbvie | ABBV | 100.340 | 27.27 | 92.19 | 79.7 | 117.8 | -8.5 | 3.62 | 8.44 | 2.8 | 5.37 |
Alexion | ALXN | 122.710 | 3.47 | 97.36 | 134.57 | 30.18 | 35.4 | 7.34 | 12.56 | 1.9 | |
Amgen | AMGN | 185.040 | 23 | 194.67 | 181.47 | 111.78 | -3.97 | 4.68 | 12.17 | 2.3 | 3.2 |
Biogen | BIIB | 335.950 | 11.84 | 300.92 | 230.53 | 45.35 | -34.9 | 3.36 | 7.53 | 2.8 | |
Bristol Myers | BMY | 62.810 | 19.92 | 51.98 | 45.89 | 74.98 | 1.15 | 3.32 | 10.13 | 2.3 | 3.57 |
Celgene | CELG | 106.000 | 12.5 | 64.09 | 94.22 | 66.18 | 16.77 | 4.2 | 7.5 | 2.8 | |
Gilead Sci | GILD | 79.020 | 27.48 | 62.55 | 65.15 | 83.06 | -0.15 | 3.79 | 9.39 | 2.2 | 3.87 |
Merck | MRK | 58.660 | 39.8 | 76.41 | 76.63 | 197.94 | 3.5 | 4.74 | 14.63 | 1.8 | 2.87 |
Regeneron | REGN | 366.960 | 5.52 | 373.5 | 343.56 | 37.39 | -7.64 | 5.6 | 13.68 | 2.5 | |
Vertex | VRTX | 158.000 | 2.3 | 165.71 | 172.85 | 44.19 | 5.57 | 14.62 | 27.82 | 1.9 | |
XBI | 71.75 | 87.24 | 22.5 | ||||||||
IBB | 96.43 | 107.4 | 10 | ||||||||
FBT | 124.2 | 140 | 13.79 | ||||||||
FBIOX (Fido) | 17.74 | 19.96 | 12.96 | ||||||||
XLV | 86.46 | 89 | 5.58 | ||||||||