Healthcare and Biotech Stocks Lag the Market Again

Healthcare Stocks Lag Again as Earnings Come into Focus

• Biotech stocks got little help from the JPM Conference despite some recovery to the general market-: IBB was flat,  SPY up 2.9%.
• Small Caps are down again 2% YTD but offer some hope going forward with good stock picks and trading. XBI is a good tracking ETF.
• MEDTech had a positive trend with the IHI up 3.3% for the week.: ISRG up 13% YTD, JNJ up 3.5%, FSMEX up 5.2% YTD.

We had hoped to provide you with more detailed coverage of last week’s JPMorgan Healthcare Conference but ran into technical problems posting articles; more than likely due to all the traffic from others posting using WordPress software. We will cut back our coverage of healthcare stocks on our blog due to time constraints given that healthcare is underperforming and represents only about 10-12% weighting of the S&P 500. Moreover we need more time for trading and coverage of technology and macro given the volatility and uncertainty expected in 2025. Nonetheless there is plenty of good biotech research from investment banks  and newsletters.

If you follow the market you know that over the past year the leading sectors have been technology, communication services, consumer discretionary and financials. You can track sector performance here.

Some large caps took a major hit in 2024: ABBV, LLY,  REGN, UNH, and will need more scrutiny after upcoming earnings. Eli  LIIly down 8% WTD and United Health down 2% WTD released last week and helped continue the bearish sentiment. Dividends should hold with BMY at 4%+, PFE at 6%+ and MRK at 3%+.

Click on charts for XBI, REGN, and LLY below.

“TIME IS THE DEVOURER OF ALL THINGS.”  I don’t know who wrote this many years ago but it seems to be appropriate today more than ever.

Playbook Summary this Month

Review large cap  earnings focused on our largest positions: ABBV, GILD, LLY, PFE, UNH, VRTX.

Continue looking for strong holds and trades from our SMID trading list:  some of of our big winners  over the past year are:  ADPT, CPRX, CRMD, GH, SUPN, VCEL, VCYT. Our trading strategy for SMID biotechs is still based on momentum.

Focus on MedTech portfolio: ABT, BDX, BSX,  FSMEX, ILMN, ISRG, SYG.