Four Homerun Biotech Stocks Too Cheap By A Half

Valuations this cheap haven’t been available in biotech since 2011, and buying any of these four stocks right now could be one of your best investing decisions of 2016. Don’t miss out on the chance to buy these undervalued biotechs that already have commercialized products for what is almost a 50% discount.

It has been a miserable six months for investors in biotech stocks, and the sector is in its deepest bear market since the end of the financial crisis. At one point during the middle of February, the main biotech indices were down more than 40% from their recent highs in July. I think this sell-off is starting to ebb and the sector posted some smart gains over the past week or so.

Large cap biotech stocks like AbbVie (Nasdaq: ABBV) and Gilead Sciences (Nasdaq: GILD) are selling at their lowest valuations since 2011. Marketwatch reported last week that the sell-off in small biotech stocks has been so deep that some 50 to 70 small cap biotech stocks are selling for at or under the net cash they have on their books. When sentiment improves on biotech as a whole, an explosive rally in these smaller cap names could well be in the cards when looking at historical trends from other bear market bottoms in this sector.

I personally prefer to invest in what I like to call “two-fers” in the small biotech space. These are companies that not only have intriguing pipelines they are developing but also have valuable technology platforms they have used to produce these multiple “shots on goal” that are currently progressing through their developmental pipelines. This makes these companies more attractive to larger players both for significant developmental collaboration deals as well as possible buyouts. Here are four of these two-fers in my portfolio that look enticing after the recent deep pullback in the biotech sector.

Let’s start with BioDelivery Sciences (Nasdaq: BDSI). Its stock has dropped from some $15.00 a share nine months ago to a current level of around $4.00 a share. The company has three commercialized products in the pain management space. The most exciting is called BELBUCA which was just approved in 2015 and is just beginning to hit the market.

1 2 3
View single page >> |

Positions: Long AGEN, BDSI, EGRX, and HALO

Disclosure: Small Cap Gems ...

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.


Leave a comment to automatically be entered into our contest to win a free Echo Show.