Healthcare Stocks are Rising and SMID Biotechs Have Momentum
- Many great companies are lurking in the health science sector: A, DHR, ILMN, NTRA ,WAT.
- ASCO boosts SMID biotechs with more M&A coming: XBI up 9% YTD, IWM up 15% YTD.
- MEDtech has great companies at bargain valuations: ABT, DHR, ISRG,MDT, TMO.
A mixed market yesterday as the AI Chip and big tech sell-off continued today but off its lows. The QQQ and the XLK bounced off its lower support levels today with the XLK down about 1.8%. Widely held tech stock losers were chip and software stocks like AMD down 3%, QCOM down 5.67%, ORCL down 2.87%, and MSFT down 2.03%. The MAGS was down only 1.3%. The best tech stocks today were: GOOGL up 0.26%, NVDA down 0.22%, and semiconductor equipment stocks off their highs but up over 1%. AAPL was down 3.65% just after reaching a new high with some concern that their new AI model will have lower margins.
The Healthcare sector continues to be a good place to trade and hide from the current volatility with the XLV up 1.26% to the $154 level. Helping support the healthcare sector were the XBI up 2.3% and the IBB up1.46% as the SMID biotechs were in a green screen mode perhaps emboldened by the Glaxo (GSK) acquisition of Nuvalent (NUVL) up 39%, for $10.6B. There were many 3+% movers among stocks on our trading list today: ABSI, ADPT, DNLI, DNTH,GH, NTRA, PTGX, TXG, VCYT, and XNCR. We added AMRX tour trading list. As of 10a EDT most of these SMID biotechs are green.
We added to our SMID biotech positions: AXSM, AMRX, NTRA, SUPN.
We added also to BDX, GEHC, ISRG in the “bottoming” US Medical Device sector with the IHI up 2.17% to $50.94. We hold small positions in ABT, BDX, GEHC, ISRG, MDT and WAT.
Assuming that the market broadens rather than a major correction there is good value in so called health technology stocks like “tools and diagnostics. Two of our best recent picks are Ilumina (ILMN) and Natera (NTRA). And one our best stocks overall in genomics has been Guardant Health (GH) up 164% over one year.
Take a look at Fidelity Medical Technology Fund (FSMEX) up almost 3% yesterday but down about 25% over one year, and 40% over 5 years! They peaked in the pandemic bubble/
Keep sectors in mind when re-balancing your portfolio.