Biotech Stocks Are Rallying: What Is Your Playbook?
Image Source: Unsplash
Playbook for the Biotech Bull Run
- Pick a basket of Large Cap biopharma stocks: ABBV, LLY, MRK, PFE, VRTX. (see updates on ABBV and BMY).
- Buy a biotech fund (FBIOX) and the XBI.
- Trade SMID biotech stocks with the XBI. More difficult and with increasing volatility.
If you have been reading our posts you know that some of the big biotech winners have taken a hit after earnings : LLY, MRK and REGN. But ABBV, GILD, LLY, and VRTX remain among the top performers. Three of our top picks have sold off but are in a value buying range: LLY, MRK, PFE. We are still looking for PFE get some good news and trade above $30 with a dividend above 6%.
What is surprising over the past quarter is the volatility among the large caps ABBV gapped up and AZN gapped down on pivotal trading days over the past month. BIIB and GSK continued a downward trend for many months. And Regeneron a top pick for many years took a big revenue and earnings hit from Eylea competition. JNJ remains stagnant as it restructures into a MEDTech and BIOpharma powerhouse while it extricates itself from its endless talc litigation. What we also need to factor in at some time is the TRUMP administration healthcare polices.
**BUT today to show the volatility of this once staid group ABBV was down 12.57% to the $174 level on Phase 2 results for its schizophrenia drug recently acquired in the $8.7B Cerevel deal. BMY gained 10.49% on their schizophrenia drug the recently received FDA approval.
Another option is to buy a biotech fund like Fidelity Select Biotech Portfolio (FBIOX) that is weighted toward large caps: ABBV, GILD, LLY and is up 26% YTD.
SMID CAPs- Life in the Fast Lane with Momentum Stocks
Our SMID cap trading list was developed early in 2024 and rests have been outstanding. Some of the recent performance was outlined in posts we did over the last two weeks. Today there were several big winners: ADPT, CRBU, CRSP, PACB, RZLT, TEM, VCYT etc. But in light of recent big moves and volatility we would suggest a more measured approach to trading these SMID caps.
LARGE CAP BIOPHARMAs Metrics
Data as of FRIDAY NOV 10, 2024.
| 1/15/18 | 3/31/23 | 11/1/19 | 10/8/2023 | 2024 | YTD | FWD | Analyst | % | 1 yr % | % | ||||
| Company | Ticker | Price | Price | Price | Price | PRICE | 1 mo. | |||||||
| 11/10/24 | % Perf | P/S | PE | Recom | Div | |||||||||
| Abbvie** | ABBV | 100.000 | 159.37 | 81.75 | 148.23 | 199.5 | 28.73 | 6.32 | 16.46 | 1.78 | 3.09 | 40.46 | 3.36 | gap u |
| Alexion(ALXN) | ALXN | 123.000 | 182.5 | 109.38 | – | 40.33 | n/a | 4.56 | 9.38 | n/a | AZN | |||
| Amgen | AMGN | 185.000 | 241.75 | 221 | 263 | 325.28 | 12.94 | 5.47 | 15.68 | 2.2 | 2.8 | 19.04 | 2.39 | |
| AstraZeneca* | AZN | 35.000 | 69.41 | 40.34 | 67.42 | 64.5 | -4.25 | 4.07 | 13.76 | 1.93 | 2.41 | 1.51 | -16.11 | gap d |
| Biogen | BIIB | 336.000 | 278.31 | 299.2 | 263.25 | 173.04 | -33.13 | 2.72 | 10.22 | 1.75 | – | 25.32) | -5 | low |
| Bristol Myers* | BMY | 63.000 | 69.31 | 57.16 | 56.66 | 54.14 | 5.52 | 2.29 | 7.68 | 2.85 | 4.42 | 3.28 | 3.16 | |
| Celgene* (BMY) | CELG | 106.000 | n/a | 108.53 | – | 77 | n/a | 4.69 | 8.7 | n/a | ||||
| Gilead Sci | GILD | 79.000 | 82.97 | 61.69 | 74.74 | 96.57 | 19.2 | 4.19 | 12.96 | 2.09 | 3.18 | 23.96 | 13.33 | high |
| GlaxoSmithK* | GSK | 38.000 | 35.58 | 45 | 36.65 | 36.29 | -2.08 | 1.86 | 8.28 | 2.5 | 4.3 | 3.51 | -4.55 | low |
| Johnson&J* | JNJ | new | 155.47 | -0.81 | 4.23 | 14.69 | 2.18 | 3.01 | 3.41 | -2.64 | ||||
| Eli Lilly | LLY | 85.000 | 343.42 | 113 | 565.22 | 831.54 | 42.65 | 20.14 | 36.76 | 1.62 | 0.66 | 34.31 | -8.99 | rsi low |
| Merck | MRK | 59.000 | 106.39 | 78 | 103.88 | 102.92 | -5.6 | 4.21 | 10.94 | 1.58 | 3.05 | -1.42 | -5.16 | low |
| Pfizer | PFE | 40.8 | 33.13 | 26.72 | -7.19 | 2.45 | 9.21 | 2.23 | 6.31 | -13.3 | -8.43 | rsi low | ||
| Regeneron | REGN | 367.000 | 821.67 | 310.48 | 836.57 | 828.42 | -5.68 | 6.61 | 18.32 | 1.82 | – | -0.68 | 6.13 | low |
| Vertex | VRTX | 158.000 | 315.07 | 196 | 360.62 | 516.74 | 27 | 12.89 | 27.46 | 1.97 | – | 37 | 12.59 | high |
| 3/31 | 11/19 | 10/7/23 | 11/10/24 |
%YTD |
1 yr | 1 mo. | Trend | |||||||
| XBI | 76.21 | 93 | 72.23 | 104.18 | 16.68 | 50 | 7.29 | u | ||||||
| IBB | 129.16 | 119.65 | 122.48 | 148.85 | 9.57 | 25.63 | 4.09 | u | ||||||
| FBIOX | 15.63 | 20.26 | 15.47 | 22.47 | 26 | 50.2 | 6.59 | u | ||||||
| PRHSX | 87.75 | 79 | 86.37 | 99.55 | 13.25 | 17.26 | 0.83 | u | ||||||
| XLV | 129.46 | 121.11 | 128 | 150.18 | 10.12 | 17.1 | -1.06 | – | ||||||
| XPH | 41.01 | 39.47 | 39.05 | 48.05 | 15.45 | 31.14 | 9.35 | u | ||||||
| UNH | 472.59 | 252 | 524.81 | 615.81 | 16.97 | 14.73 | 5.89 | u | ||||||
| QQQ | 320.93 | 201.23 | 364.7 | 514.14 | 25.55 | 37.86 | 5.08 | u |
More By This Author:
Smaller Cap Biotechs Are In Season: How Are We Doing?Volatility Hits Large Cap Biopharma: Active Rebalancing May Be Required
Biotech Momentum Trades For The Q4 Rally
Same here.
What do you mean? $PFE has steadily been going up for the past few days.
Nah, only for the past day or two... and we're deflating again. As usual. That's what we do.
1. Breakthroughs that change patients' lives;
2. Outdoing yesterday;
3. Deflating