Update-4. 4/3 11:45A… Mid and Small Cap biotechs are momentum leaders: XBI hits 2019 high at $92.50.
Update-3 4/2/19… Biotechs Outperform Major Market Indices
- Gene therapy stocks rally big: SGMO 28.96%, VYGR 7.38%, CRSP 6.91% NTLA 4.9% MGTX up 4.6%, etc.
- Most Mid-Caps green: BPMC up 2.2%, SRPT up 3.88%, AGIO up 3.41% etc.
- Large caps mixed but ABBV and ALXN lead up.
- XBI up 1.44% to $91.73 near 2019 Highs.
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(note this post was updated on 3/31)
Our Top Picks From 2019 J.P.Morgan: High Volatility in Small Caps but Still Look Good for the Long Term
Macro News Buffets Stocks: Global Growth and Yield Curve
Life Science ETFs Do Well but no Breakthrough Levels Still Below 2018 Highs
January 2019 was an excellent entry point for equities after the disastrous Q4 of 2018 when both the QQQ and the XBI hit 12 month lows QtQ going back to 9/17. One compelling reason given for the market recovery was a pivot from the FED now apparently holding rates at current levels. The Russell 2000 also recovered in Q1 up 15.8% but losing momentum. Mid-cap biopharmas remain strong with M&A expectations. High volatility should be expected for small cap growth stocks.
Here is the performance of selected life science and healthcare and life science ETFs for Q1 2019. Note that the prices as of 3/29 are still below 2018 highs hit around 9/18.
FBT up 2% today, up 21.6% QTD at $150.85. Up 19.49 % over 12 mos.
IBB up 2.14% today, up 14.5% QTD at $111.80. Up only 9.09% over 12 mos.
XBI up 1.86% today, up 24.83% QTD at $90.28. Up only 7.8% over 12 mos.
XLV up 1.2% today, up 7.7% QTD at $91.75. Up 15.34% over 12 mos.
QQQ up 0.76% today, up 19.9% QTD at $179.66. Up 15.53% over 12 mos
And here is an update of selected small cap picks from the JPM Conference during the week of January 7. Caution these stocks can be volatile.
Amarin AMRN), up 62% YTD, in at $14 level at JPM Conference.
Amarin is developing innovative therapeutics to improve cardiovascular health.The Company leverages its scientific knowledge in lipid science and received FDA approval for its first product Vascepa (icosapent ethyl) a safe targeted polyunsaturated, fatty acid drug available on prescription. A recent study showed a 26% reduction in key secondary composite endpoints of cardiovascular death, heart attacks and stroke. Additional studies are underway to treat high triglycerides and reduction of cardiovascular events. The stock was up over 11% today to the $20.50 level. Market Cap is $6.8B with revenues of $229.2M. P/Cash is 26.11, Debt/Eq is 0.62,QtQ sales growth is 43.4%. Revenues are on track but earnings missed last quarter(0.39).A class action suit is underway but we have no analysis. Two analysts have a “strong buy” and 3 have a buy on AMRN. The stock has a 1 month double peak at the $22 level.
Recently the American Diabetes Association (ADA)added fish oil capsule to its standards of care list with cardiovascular disease or certain risk factors.
Genmark GNMK), up 43.5% YTD, in at low $6 level at JPM Conference.
GenMark (GNMK) is a platform driven clinical diagnostic Company with the only rapid routine blood culture identification system called ePlex with modular capability for up to 288 patient samples per day.Another system called the XT-8 offers panels of tests for respiratory viral, HCV genotyping, warfarin sensitivity and cystic fibrosis. The Company last reported on 2/21 with top line growth of 35% for 2018 on revenues of $70.8M. 42 new ePlex systems were sold bringing the installed base to 354 analyzers. Loss per share was 0.21 compared tp 0.26 in the prior year. Market Cap is $411.21 M, with a P/S of 5.81, debt/equity of 1.07 and QtQ revenue growth of 21.2%. Last earnings forecast were missed.Two analysts have a “strong buy”, 4 have a buy. The stock peaked 2/27/19 at $8.
TeleDoc (TDOC) up 20.27% YTD, in at low 50s at JPM, off peak of low $70s in late February.
Teledoc provides telehealth service worldwide. It offers a portfolio of services and solutions covering 450 medical subspecialties. The stock volatility is the result of many class action lawsuits which are beyond our analysis, as well as questions about the future growth and earnings trajectory The Company has been aggressive with acquisitions and recently expanded their telemedicine-anytime, anywhere, high quality physician services in Canada. The Company completed a recent acquisition in France with Me’dicin Direct showing a strong commitment to International growth.There are 13 analyst recommendations on the stock with 5 strong buys, 6 buys and 2 holds. The stock has been a roller coaster but with good opportunities for trading from early January but recently hit a low near $50 just last week. Here are 2018 Financial Highlights as reported on 2/27.Market Cap is $3.8B with a P/S of 9.09 with a QtQ revenue growth of 59%. LT Debt to Equity is 0.41. EPS for next year is forecast at (1.04). Revenue guide for 2019 is conservative at $535-545M compared to $417M in 2018.
Disclosure long: AMRN BLUE, CRSP, GNMK, ILMN,TDOC