Hot fun in the summertime! Will try to post a new article on Healthcare and Biotech tomorrow August 7.
Update-4 Aug 3…Large cap biopharmas favored as spec stocks fade with XBI at $81 handle lacking momentum, near low for 30 days. Earnings looking good for large cap top picks REGN and VRTX with top line growth and strong pipelines. Regneron has recovered most of their losses. from FDA delayed approval and expects higher dose Eylea to be approved this year. Merck had 3% sales growth helped by KEYTRUDA and GARDISIL with WW Sales of $15B, full year forecast raised with adjusted loss of $5.2B or $2.06/sh.due to $1.2B charge from Prometheus acquisition.
LLY e up next week on AUGUST 8.
No help and brief sell-off from former growth superstars in DX and Tools DHR and TMO after earnings. Look to longer term.No position.
Hologic (HOLX) sells off despite beat and 18%growth excluding COVID Dx decline.
DX andTools long: BDX, HOLX,PACB,QDEL, VCYT. PACB reports loss raises revs announces acquisition.
BDX down 2.73% despite strong Q3 Financial Results, Revs up 5.1% to $4.9B, diluted EPS of $2.96, raises full yr growth. A new pick.
=========
Update-3 Aug 2…Concern from Zimmer Biomet (ZBH) on joint reconstruction market. IHI down 0.9% to $55, ISRG down 2.33%.
Update-2 August 1 Healthcare Stock Performance Lags All Major Indices
WE will update specific companies we own and follow at the end of this week.
Here is where we are on healthcare stocks after the huge July Rally:
- The overall healthcare sector (XLV) improved mainly from the UNH earnings beat.
- Positive trends are beginning with MedTech with the IHI and ABT.
- Speculative and SMID biotech are stalled with the XBI flat YTD. But ARG is up for the month and 31% YTD.
- Top biopharmas are: LLY, MRK, REGN, VRTX and AZN, but the biopharmas did not do well in July.
- THE QQQ outperforms all indices up 43.75% YTD. Cyclicals and the DOW are trending up.
| Model | ||||||||||||
| PORTFOLIO | ||||||||||||
| 2020 | 2020 | 2020 | 2021 | 2022 | 2023 | 5 yr Total | ||||||
| Stock/ETF | Ticker | Price | Wgt | Price | Price | Price | Price | |||||
| 10/25 | % | 12/31 | % Perf | 12/31/21 | 12/31/22 | 8/1 | % Perf | %Perf | % | |||
| P | 30 days | YTD | ||||||||||
| iShares NAZ Bio | IBB* | 136 | 15 | 151.5 | 25.7 | 152.62 | 130.55 | 128.05 | 0.86 | -2.47 | 9.29 | |
| iShares Russell 2k | IWM | 163 | 10 | 196.4 | 18.3 | 222.45 | 174.36 | 197.8 | 5.62 | 13.44 | ||
| Merck* | MRK | 80 | 10 | 81.77 | -10 | 76.64 | 110.81 | 105.28 | -8.76 | -5.11 | 68.47 | |
| United Health | UNH | 330 | 10 | 350.7 | 27.19 | 502 | 530.27 | 504.74 | 5.01 | -4.8 | ||
| SPDR S&P Bio | XBI | 117 | 15 | 140.8 | 48 | 111.96 | 83 | 83.3 | 0.12 | 0.36 | -12.6 | |
| Healthcare SPDR | XLV | 108 | 20 | 113.4 | 14.71 | 140.89 | 135.88 | 133.45 | 0.54 | -1.77 | 59 | |
| T.Rowe Hlth Sci | PRHSX | n/a | 5 | 99.65 | n/a | 104 | 89 | 90.77 | 2.9 | 1.06 | ||
| iShares U.S MedT | IHI | 50 | 10 | 54.83 | 65.85 | 52.57 | 55.68 | -1.38 | 5.92 | |||
| MedTech* | ABT | new | 5 | 123.5 | 127.46 | 109.83 | 110.53 | 1.39 | 0.67 | 70.62 | ||
| Tracking Comp | ||||||||||||
| ARK Genomic | ARKG | 93.26 | 61.24 | 28.23 | 37.04 | 8.65 | 31.21 | |||||
| Direx3X Bull | LABU | 7.66 | 5.83 | -1.52 | -17.54 | |||||||
| FIDO Biotech | FBIOX | 25.18 | 19.35 | 16.04 | 16.78 | 1.08 | 3.07 | |||||
| FiDO MEDtech | FSMEX | 76.15 | 83.18 | 61.58 | 64.64 | -1.19 | 4.97 | |||||
| DOW | DIA | 310 | 363.32 | 331.34 | 356.2 | 3.59 | 7.51 | |||||
| S&P 500 | SPY | 379 | 475 | 382.41 | 456.48 | 2.98 | 19.36 | 62.53 | ||||
| NASDAQ-100 | QQQ | 315 | 397.85 | 266.33 | 382.79 | 3.62 | 43.75 | 115.22 | ||||
| Technology SPDR | XLK | 128.93 | 161.97 | 124.44 | 178.65 | 2.76 | 43.56 | |||||
| Top Biopharmas | 8/1 | |||||||||||
| 5 yr % Total | ||||||||||||
| Abbvie | ABBV | 161.64 | 148.54 | 10.25 | -8.09 | 58.17 | ||||||
| Astra Zeneca | AZN | 68 | 71.45 | -0.17 | 5.38 | 84.39 | ||||||
| Bristol Myers Sq | BMY | 71.05 | 61.53 | -3.78 | -14.48 | 3.2 | ||||||
| Gilead Sci | GILD | 85.39 | 75.68 | -1.8 | -11.85 | -2.85 | ||||||
| Eli Lilly | LLY | 447.71 | 453.09 | -3.39 | 23.85 | 359 | ||||||
| Merck | MRK | 110.95 | 105.28 | -8.76 | -5.11 | 68.47 | ||||||
| Pfizer | PFE | 51.24 | 35.61 | -2.92 | (30.5) | -6.8 | ||||||
| Regeneron | REGN | 725 | 739.07 | 2.86 | 2.44 | 99.19 | ||||||
| Vertex | VRTX | 288.78 | 347.74 | -1.18 | 20.42 | 95.5 | ||||||
=================
Update-1 on vacation until August 1
Expect a broadening of the current rally into healthcare, financials and energy.
- FED day Wednesday with expected 1/4 pt increase in rates.
- MedTech has been a laggard but shows a lift -off with ABT and JNJ.
It’s a big week for earnings that may change the trajectory of the rally but more than likely will continue the rotation into different sectors. For example last week we saw a broadening of the rally with S&P 500 strength in energy up 3.53%, healthcare 3.46%, financials up 2.95% while the strong InfoTech group was flat. We saw the pivot up in the Healthcare sector sparked by United Health and then supported somewhat by JNJ earnings. This week we can see if large cap tech can regain momentum with reports from AMZN,GOOGL, MSFT and META. And for biotech and healthcare stocks in our portfolio we’ll have reports from ABBV, BMY, PFE and others but the following 2 weeks will have an avalanche of earnings. Boston Scientific (BSX), Danaher (DHR) and ThermoFisher (TMO) will report this week (no positions), both stocks were up over 4% last week. ABBV reports as well on Friday.
Biogen (BIIB) reports on Tuesday and there is a lot of interest in this relatively undervalued stock because of the FDA approval of Leqembi we have potentially a new category of Alzheimers’ treatment with two major drugs. The Lilly drug donanedab may get approval by year end. Both drugs are monoclonal antibody drugs that attack amyloid plaque (Abeta and tau). Lilly presented data last week to show that it slowed progression of the disease. Biogen trades at a PE of 12.85, a P/S of 3.94 largely from its MS franchise and has “recommend” rating of 2.0. Long LLY.
Our top SMID picks are: HOLX, PACB, QDEL, VCYT.
Long IHI with top holdings TMO, ABT,MDT ,ISRG, EW. 1 yr. performance up 12.51% 3 yr 8.95%.
Two funds that we own that are a good indicator of strength in MedTech, Diagnostics and Tools so they should do well this week.We will review the detailed performance of each fund after Q2 earnings.
- Fidelity Select Portfolio Medical Technology and Devices Portfolio (FSMEX) up 13.93% 1 yr, 7.1% 3 yrs.
- T. Rowe Price Health Sciences Fund (PRHSX) up 7.73% 1 yr., up 6.95% 3 yrs.
Trades: We are nibbling on Ilumina (ILMN). Take a look at Catalent(CTLT) at $47.59 as Elliot Investor is taking a stake. Catalent has had a series manufacturing and Regulatory problems.
New Pick long last week Becton Dickinson (BDX) up graded by Raymond James today.