Biotech Stocks Can Provide Growth And Value In A Volatile Market

As a sign of weakness in biopharma note that the Investor’s Business Daily has only 2 Life Science stocks in its IBD 50 analysis. The two are:  Ligand Pharma (LGND) #24, Hologic (HOLX) #45  but two are notable -Repligen (RGEN) is a sector leader and Idexx Labs (IDXX) is a Large Cap 20 Leader.

Small Caps Are Still Leaders and Should Support Life Science Stocks

Our best winners over 12 months have been smaller caps like GNMK, PACB, and TDOC but the momentum is ebbing. The IWM is up 11.35% YTD off highs of early February, and the iShares Russell 1000 Growth (IWF) is down 0.8% YTD. The iShares Russell 1000 Value is still up 5% YTD A better small-cap ETF is the iShares Core S&P Small-Cap (IJR) up 14.35% YTD. The IPO market is still robust and low rates support the financing of biotech companies are and small.

Healthcare Model Portfolio from 10/25/20

    Initial                    
Stock/ETF Ticker Price Wgt P 11/13 P 11/27 %Perf Price QTR 2020 Yr Price %Perf  
    10/25 %     1 mo. 12/31 % % Perf 2/28/21 month  
iShares NAZ Bio IBB 136 25 141.06 143.22 2.27 151.5 11.9 25.7 156.93 -0.7  
iShares Russell 2k IWM 163 10 173.51 184.37 16.56 196.4 30.9 18.3 218.31 1.64  
Merck MRK 80 10 81.09 79.86 2.4 81.77 -1.39 -10 72.62 -9.51  
United Health UNH 330 25 355.67 337.94 5.44 350.7 12.5 19.3 332.22 -4.48  
SPDR S&P Bio XBI 117 5 125.04 131.46 11.95 140.8 26.3 48 148 -2.82  
Healthcare SPDR XLV 108 25 112.12 109.44 3.35 113.4 7.55 11.4 112.61 -4.86  
                         
                         
S&P 500 SPY                 380.36 -1.05  
NASDAQ-100 QQQ                 314.14 -4.26
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