Update-1… See Caution 9/29
Rayno Portfolio Outperforms the Market
Biotech stocks are near their intermediate highs but still down in 2016 : IBB at $295 down 12.78% and the XBI at $67.80 down 3.42% YTD. Since the June 30 bottom the sector has recovered and is in an upward trajectory, despite a small dip in late August, with smaller more speculative stocks gaining momentum. Tape action has been good.
Our 2016 Portfolio picks below show a total return of 9% despite some big drops with Bristol Myers (BMY) and Gilead Sciences (GILD). If you just played the sector with the IBB you would be up 15%. For part time investors we recommended two ETFs and a broad life science fund.
- The biggest winner up 58% was bluebird bio (BLUE) a volatile gene therapy stock.
- We overweighted large cap stocks with dividends but that hurt performance because of Bristol Myers (BMY) disappointing trial with Opdivo in a key lung cancer study.
- Gilead Sciences’ stock continues to lag due lower scrips for HCV. The Gilead drug actually cures HCV infection so patients are fewer.Looking for major acquisition?
- Foundation Medicine (FMI) is in the forefront of pharmaco-genomics but can be a volatile stock; downside loss is mitigated by Roche (RHHBY) holdings. Up 16.7%.
- Amgen (AMGN) was recently added as a dividend and value play with a fwd PE of 13.6.
We will resume coverage of Diagnostics and Tools stocks in Q4. We dropped coverage in 2015 due to limited revenue growth and an overall market correction. At that time we felt Illumina (ILMN) and ThermoFisher were quality growth companies. Here is our review from 11/5/15.
Nonetheless if you held our top picks through the correction you would have made money on several diagnostic stocks: Alere (ALR), Cepheid (CPHD) and ThermoFisher (TMO).
Disclosure long: ABBV,BMY,FMI,GILD, RHHBY.
|Company||Ticker||Date Started||Price||Price 9/28||%Perform|
|Bristol Myers||BMY||2/16/16||61||55.09||-11||Div 2.74%|
|Gilead Sciences||GILD||2/3/16||85.8||79||-7.9||Div. 2.33%|