Update-2 5/5….11a EDT Biotech rally continues with strength in SMID stocks: up 1.9% to $85 handle. Gene therapy stocks strong: CRSP EDIT NTLA.
- IWM up 1.83%to 1750.
- Spec small caps up big: Acumen (ABOS) up 30% on AD research , VCYT
- ARKG flat at $29 level.
- Mid cap winners: AGIO ARWR LGND RCKT
Update-1 5/3/23 Strong day for biotech even though off tops of the day during FEDspeak. XBI up over 4% to $83 handle. Need one more day of trading to consolidate rally. Rally probably sparked by Eli Lilly News on Alzheimer drug with LLY up over 6%.
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SMID Life Science and Healthcare Stocks: Some Good Picks in a Stalled Sector
- Biotech stocks have stalled but these SMID picks have done well.
- FED week-major impact on the market with another 0.25% rise expected this week despite moderating inflation.
- Looking for a shift from large caps to small and mid caps in the general market.
A pivotal week coming up with the usual MACRO concerns, a FED meeting, and a big earnings week– VRTX, PFE, BDX and REGN. Another negative backdrop is the debt ceiling hangover through June. One possible path around the MACRO is our SMID stock picks we have tracked since mid- January. With megacap techs leading the market in 2023-AAPL GOOGL MSFT- I was surprised to see most of these SMID stocks doing well YTD. Some of them we bought in Q4 are doing even better. So maybe it’s time for a small cap growth comeback because their business models are less affected by the FED and banking issues. But the major SMID ETFs are still lagging compared to large cap tech and the QQQ. With the lack of momentum in the sector each stock pick needs to have compelling news or revenue growth.
As we have pointed out in articles many times the primary indicator of the small cap life science sector is the SPDR S&P Biotech ETF (XBI) which has been choppy at best down over 3% in 2023. The IBB has fared a bit better still in an upward trend since October 2022 because of larger cap weighting. So with that perspective our SMID picks have done well. We traded the XBI in and out and we are back in at $80 a potential pivot point. All other positions are intact. Some of the stocks are momentum driven and volatile like CRSP, PACB, VCYT, others are longer term plays EVH, HOLX, QDEL offering good value. But large cap biopharma is also doing well except ABBV which took a hit on a revenue miss.
We will update and rebalance the portfolio after Q1 earnings.
XBI choppy and stalled. IBB weak uptrend .
Long all of these stocks but trading the XBI.
| P 1/20/23 | % Perf | 2/4/23 | 4/29/30 | ||||||||
| Company | Ticker | $ | P | % week | % Perf | P | Month % | YTD % | |||
| CRSPR Therap | CRSP | 49.61 | -25 | 55.27 | 4.72 | -15 | 48.94 | 11.61 | 20.39 | ||
| Cryoport | CYRX | 21.75 | -42.34 | 25.24 | 9.41 | -33 | 21.04 | -2.09 | 21.27 | ||
| Evolent Health | EVH | 30.83 | 13.74 | 31.96 | 2.21 | 17.91 | 36.41 | 19.38 | 29.67 | ||
| Geron | GERN | 3.19 | 9.24 | 3.22 | 3.59 | 10.27 | 2.46 | 13.36 | 1.65 | ||
| Hologic | HOLX | 79.66 | 22.41 | 84.68 | 2.28 | 30.14 | 86.01 | 9.11 | 14.97 | ||
| Pacific Biosci | PACB | 11.29 | 55.68 | 11.58 | -1.7 | 59.67 | 10.6 | 16.1 | 29.58 | ||
| Quidel/Ortho | QDEL | 88.13 | -11.56 | 89.7 | 3.93 | -9.98 | 89.95 | 2.85 | 5 | ||
| Supernus | SUPN | 40.3 | 12.3 | 41.61 | 2.29 | 15.95 | 36.86 | 1.29 | 3.34 | ||
| Veracyte | VCYT | 24.89 | 39.43 | 26.67 | 2.46 | 49.41 | 22.64 | 10 | -4.59 | ||
| SPDR Biotech | XBI | 86.99 | 14.75 | 90.39 | 1.12 | 19.24 | 80.21 | 7.72 | -3.37 | ||
| wildcard | |||||||||||
| Invitae | NVTA | 2.555 | – | 2.62 | 3.15 | 0.67 | 1.36 | 13.33 | -26.88 | ||
| 1 yr | |||||||||||
| iShares CoreS&P | IJR | 94 | -0.34 | -0.68 | -7.93 | ||||||
| iShares Russell | IWM | 175.2 | 1.01 | 0.48 | -8.01 | ||||||
| iShares BIO | IBB | 130.51 | 3.53 | -0.59 | 9.63 | ||||||
| NASDAQ-100 | QQQ | 322.56 | 5.03 | 21.14 | -1.66 | ||||||
| HealthcareSPDR | XLV | 133.53 | 5.1 | -1.71 | -0.15 | ||||||
| Energy SPDR | XLE | 85..13 | 5.38 | -2.68 | 10.37 | ||||||
| T.RowePrice | PRHSX | 90.88 | – | 1.18 | 2.45 | ||||||
| SMID Souck Portfi |