Update-2 Choppy Day but Investors coming Back to Healthcare and Biopharma.
- IBB and XLV up a tad. XBI flat.
- Rotation out of high flying tech into healthcare and industrials.
- Large caps winners : AMGN and GILD then AZN,RHHBY,MRK looking for large caps that have Dx and Vx plays.
- Coronavirus stocks-vaccine plays strong: BNTX INO MRNA NVAX .
- COVID Diagnostics more important than ever-strong today: CODX,HOLX,OSUR,QDEL.
Update-1 9/8 Another Big Sell-Off for NASDAQ down 4.11% to 1084
At this point in time we still favor the smaller cap weighted XBI over the IBB. Moreover the IBB looks to be a better investment than large cap stock picking because it is less volatile.For example today ALXN AMGN BMY VRTX and others were down over 2%.
- IBB down 1.86%, XBI down 1.37%, XPH down 1.13%.
- Coronavirus stocks in the green: AZN, BNTX,CEMI,CODX, INO, OSUR
- Large cap biopharma winners: AZN, GSK,RHHBY.
Large Cap Biopharmaceutical Performance 2020 as of 9/4/20
The biopharmaceuticals sector rallied quickly from early March lows as they were perceived to offer solutions to the pandemic such as antivirals and vaccines. However since mid-July the sector has underperformed the S&P which is up 6% YTD. Biotech fared a tad better up 7-10% YTD. But tech stocks were big winners with the QQQs up 33%! One major advantage in holding large cap biopharmaceuticals in your portfolio is that they pay nice dividends, are well followed and provide more stable revenue growth.
Last week the market was buffeted by a major correction with tech stocks being hit harder than healthcare and biopharmaceuticals. The XBI bounced off the weekly low Friday just over $100 and closed at $105.39 on good volume.
We will update on any news or moves throughout the week.
Here are trends to track over the next few months as we go through Q3 earnings reports:
- The IBB was up over 7% YTD so it was a better play than trying to pick individual large cap stocks.
- More aggressive investors can trade the XBI, the bellwether ETF of the biotech group.
- Merck(MRK) has the best performance of the dividend paying group.
- Abbvie (ABBV) appears to have good value, pays over 5% but the technicals look weak.
- GSK and MRK, have COVID vaccines in development; GILD and REGN aniviraks in R&D.
- The most of these stocks are trading within 20% of their 52 week range: ALXN, AMGN, AZN, MMY, MRK REGN VRTX.
- The healthcare sector also lags the S&P in 2020 up only 3.77%.
- Roche ADR (RHHBY) is not included but we are long.