Update-1 8/20 After a choppy week, many smaller caps turn green !
Small cap life science stocks have been in a steady sell-off but the tape looks better today. All of our recent top picks are up: CRSP, CYRX and VCYT. Indicators for momentum are also up: ARKG and XBI. NASDAQ was up 1.19%.
I have other small positions moving in the green today as well: GKOS, PACB, QDEL,TDOC . Is this a turning point? not yet as the IWM is still off for the week $221 to $215. Overall the best strategy has been large cap tech and biotech/
Our favored Large Cap Biopharma stocks-ABBV, BMY, GILD, REGN– did well despite a choppy week for the IBB.
Large Cap Biopharma Stocks provide Growth and Value
- Revenue and PE metrics still look good compared to market; dividends a plus.
- M&A potential is a wild card because of opportunistic deal making.
- Blockbuster news drives selected stocks higher: BIIB, REGN
It was a flattish week ending 8/15 but with major indices at new highs. The S&P 500 Healthcare Index was up 0.53% and biotech still lags in healthcare yet Large Cap Biopharma is doing well YTD. The leaders for this week showed some rolling rotation: DJTransportation up 2.93%, S&P 500 Materials up 2.68%, S&P 500 Staples 2.08% and S&P500 Financials 1.88%.
Biotech Stocks Trail the Market-IBB up 11.82%.
As you can see from the performance chart below the equal weighted XBI biotech ETF is down 11.48% showing that speculative small cap biotechs are off February 2021 highs as we enter a period of weak seasonality. Our recent Portfolio Model for healthcare showed an equal weighting of IBB and XLV for conservative investors.
Most large cap Biopharma stocks are near 52 week highs except for foliowing laggards: AMGN, MRK, VRTX. Good value stocks with dividends can be seen with BMY. GILD, and GSK. Gilead Sciences technicals look good.
The best performing large cap has been the more speculative Biogen (BIIB) due to the unexpected approval of Aduhelm which is still mired in controversy. The stock is off its 2021 high of $468.
Regeneron (REGN) is up over 29% YTD primarily due to improving financials and its COVID Antibody cocktail. EYlea and Dupixent sales were strong.
We are also long a little Pfizer (PFE)* which only recently has moved to new highs after 20 years because of its COVID vaccine revenues.
US drug pricing reform has come up again with talk of Medicare negotiating drug prices so this could be a risk for these stocks.
*stocks not included in chart metrics.
Disclosure Long: ABBV, BMY, GILD, MRK, REGN, RHHBY*
| 1/15/18 | Rev$B | 8/14/21 | 11/1/19 | 2021 | YTD | FWD | Analyst | % | ||||
| 2018 | $B | P/S | PE | Recom | Div | |||||||
| Abbvie | ABBV | 100.340 | 27.27 | 116.48 | 81.75 | 205.84 | 8.71 | 3.85 | 8.48.37 | 2 | 4.43 | |
| Alexion*(ALXN) | ALXN | 122.710 | 3.47 | 182.5 | 109.38 | 40.33 | 17 | 4.56 | 9.38 | 2.2 |
acquired by AZN
|
|
| Amgen | AMGN | 185.040 | 23 | 229.68 | 217.95 | 130.43 | – | 5.26 | 12.77 | 2.4 | 3.07 | |
| AstraZeneca* | AZN | 58.48 | 40.34 | 181.18 | 17 | 5.31 | 17.54 | 1.5 | 2.51 | see ALXN | ||
| Biogen | BIIB | 335.950 | 11.84 | 342.25 | 299.2 | 51 | 39.8 | 4.32 | 16.43 | 2.3 | – | |
| Bristol Myers | BMY | 62.810 | 19.92 | 67.51 | 57.16 | 150 | 8.83 | 3.39 | 8.37 | 1.9 | 2.9 | |
| Celgene* (BMY) | CELG | 106.000 | 12.5 | n/a | 108.53 | 77 | n/a | 4.69 | 8.7 | n/a |
acquired by BMY
|
|
| Gilead Sci | GILD | 79.020 | 27.48 | 71.16 | 64.66 | 89.22 | 22.14 | 3.38 | 10.73 | 2.4 | 3.99 | |
| GlaxoSmithK | GSK | 41.97 | 45 | 105.6 | 14 | 2.28 | 13.44 | 2 | 5.17 | |||
| Merck | MRK | 58.660 | 39.8 | 76.72 | 84.94 | 194.2 | -1.71 | 4.13 | 11.82 | 2.1 | 3.39 | |
| Regeneron | REGN | 366.960 | 5.52 | 624.79 | 310.48 | 66.8 | 29.33 | 5.3 | 14.84 | 2 | – | |
| Vertex | VRTX | 158.000 | 2.3 | 194.36 | 215.21 | 50.4 | -17.76 | 7.63 | 14.92 | 1.8 | – | |
| XBI | 124.62 | 83.66 | -11.48 | |||||||||
| IBB | 169.4 | 109.85 | 11.82 | |||||||||
| FBT | 169.74 | 132.92 | 1 | |||||||||
| FBIOX | 22.45 | 20.26 | -10.84 | |||||||||
| XLV | 133.69 | 94.87 | 17.85 | |||||||||
| XPH | 50.06 | 39.47 | -3.84 | |||||||||
| QQQ | 368.82 | 201.23 | 17.56 |