The Rolling Bull Market-Healthcare is Coming Back
- ASCO Data will show broad oncology pipelines in blood cancers, solid tumors and genomics driven diagnostics.
- If you are a fast learner you might try trading the emerging SpaceX and satellite buzz with many small cap stocks up 500% (RKLB).
- Technology is stronger than ever with the XLK and SOXX at new highs today driven by a CAPEX expected to exceed $700B.
What’s next for this rolling bull market and should you be rebalancing by sector? Here are a few options:
- Focus on what you know in healthcare and biotech with ASCO and potentially a strong June momentum.
- Add some cyclical and value trades as technology momentum wanes.
- If you are a nimble trader with a lot of spare cash there are many small cap speculative plays in aerospace including drones.
Strategy One- Rebalance your portfolio with Healthcare stocks.
The XLV made a remarkable move last week with the XLV up 3.3% and behind this move was not only Large Cap Biopharma stocks but well known MedTechs like Danaher (DHR)and Boson Scientific (BSX) or long forgotten blue chips like Baxter (BAX) .You may be feeling bewildered by the volatility and huge moves in “compute’ stocks driven by Nvidia and its “Infinite circularity” of semiconductor, cybersecurity and storage stocks. But if you have the knowledge and patience you might consider a stock or two in the MedTech sector which has been lagging with the IHI is down 18.63% YTD and down 11,54% over 5 years! a former bluechip Baxter International is down from high of $83 five years ago. We owned some BDX over the long term and with some recent good earnings we nibbled more, but it’s very difficult to find stock momentum in any of these great companies. For example the Fidelity Select Medtech (FSMEX) Fund is down 42% over 5 yrs.But we still own ABT, BSX and ISRG for the longer term.
BIOTECH Large Caps-Oncology Pipelines Expanding
As we review clinical data on a vast portfolio of ONCOLOGY drugs presented at ASCO we expect this will be a good time for biotechnology trades and picking. long term winners for your portfolio. Over the past week large caps have been strong on the ASCO prospects
Beginning last year we expanded coverage of” Diagnostics and Tools stocks “particularly the application of Precision Oncology and MRDs. On our Trading List we have reviewed the following stocks in Cancer Dx utilizing genomics: ADPT, GH, ILMN, NTRA PSNL. Our best pick over the past year has been Guardant Health (GH) up 16% YTD and 220 % over one year. Last week their Guardant360 Liquid CDx Panel was FDA approved for a more complete actionable view of cancer from a simple blod draw. many of these stocks are well off their highs and quite volatile.Today Personals (PSNL) announced the they will present new cancer detection data at ASCO. We traded Natera (NTRA) up 33% over one year but down 11 % YTD. But Natera has good potential to move up up In the next 30 days with 35 abstracts and 3 Orals being presented at ASCOo their Signatera tool. These Tests are now being used to clinically and you probably know of somebody whose cancer treatment is being monitored.
Here are financial metrics of NTRA: technicals pretty flat since February: RSI is a neutral 50, Mkt Cap $29.1B, P/S 11.64, Analyst rating1.30, Qtr Rev growth is 38% but EPS trailing.at (1.64). Looks poised for a run .
Large cap Biopharma-Stocks to Watch
Abbvie (ABBV) $215.7, down 5.6% YTD, ASCOADC platform and T-cell engagers for prostate, lung and MM.
Astra Zeneca (AZN) $187, up 1% YTD- multiple Myeloma and an ADC for Breast Cancer with Daiichi.
Bristol-Myers (BMY) $59.46, up YTD, Anthropic AI , broad pipeline solid tumors and hematologic malignancies .
Merck (MRK) $122, up 16.3 % YTD, Keytruda combo for bladder cancer European approved, expanded market for Keytruda Ph 3 Endometrial.
Eli Lily (LLY) $1078 . flat YTD. Moving aggressively spending $3.83B into vaccine technology.
SMID Biotechs-XBI is a bit choppy
We have three ETFs to track SMID biotechs: the ARK Genomic Revolution (ARKG) , the Russell 2000 ( IWM) , and of course the XBI. Now we have seasonal factor where Mid-cap growth Investment Banker Meetings and ASCO come into play. We hope to add to our Trading List and cover clinical breakthrough news in late May and June. The Genomics theme is still strong within biotech and will show its capability in Molecular Diagnostics,Precision Oncology and Targeted Therapies.