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Despite recent events, Hillary Cinton maintains her lead over Trump and remains widely anticipated to win the race to the White House. Positions of both candidates on a variety of issues have been discussed with great detail. For instance, Clinton has continued to emphasize that the pharma industry and biotech companies in particular require greater regulation.
As a result of this stance and other issues, biotech stocks suffered losses throughout the year. However, the sector’s stocks enjoyed a rare day of gains on Monday, the strongest in months. This underlines the fact that the sector may continue to enjoy gains and enjoys strong long term potential. Adding select stocks from the sector to your portfolio could still make for a smart choice.
Clinton Protests Price Hikes
Rising drug prices first raised Clinton’s ire in Sep 2015. Her “price gouging” tweet led to a major sell-off thereby cutting short the phenomenal run of health care stocks, particularly in the biotech sector. While Clinton expressed concerns over the entire industry’s pricing practices, the tweet was primarily in response to Turing raising the price of Daraprim from $13.50 to $750 per pill in a single shot.
Matters have not been helped by Clinton’s recent tweet on a similar issue. Toward the end of August, a couple of U.S. senators raised questions about Mylan N.V. over pricing epinephrine auto-injector EpiPen. Making matter worse, Clinton posted a tweet, saying “EpiPens can be the difference between life and death. There's no justification for these price hikes." (Read: Forget Mylan, Buy These 3 Drug Stocks Instead)
Sector Still Sports Strengths
Primarily due to price related concerns, the iShares Nasdaq Biotechnology (IBB) was down 20% year-to-date at the beginning of Feb 2016. Even now the sector remains in the red and has lost around 15% since the start of the year. However, the biotech sector remains a good option for investors who are looking for investment opportunities which have little relationship with the direction the economy is taking.
Additionally, most of the sector’s losses came toward the beginning of the year. Now, stocks from this industry can only perform better. Though drug pricing will continue to be an important issue, other developments will also make their impact felt. Biosimilars are likely to gain prominence and provide the industry with a new avenue of growth.
Further, as valuations become more attractive the rest of the year could also witness the announcement of several mergers and acquisitions. Products which received approval last year are also likely to substantially add to revenues.
Our Choices
Despite the year’s reverses, biotech stocks continue to have inherent strengths. The worst could be over for the sector and it may now be poised to make a turnaround.
This is why it makes sense to pick biotech stocks at this point. We have narrowed down our search to the following stocks based on a good Zacks Rank and other relevant metrics.
ANI Pharmaceuticals, Inc. (ANIP - Free Report) is involved in developing, manufacturing and marketing generic and branded pharma products in the U.S.
ANI Pharmaceuticals has a Zacks Rank #1 (Strong Buy).The company has expected earnings growth of 55.5% for the current year. It has a P/E (F1) of 16.79.
Cambrex Corp. is a provider of a variety of products utilized in the development and commercialization of new and generic drugs across the world.
Cambrex has a Zacks Rank #1. The company has expected earnings growth of 39.8% for the current year. The forward price-to-earnings (P/E) ratio for the current financial year (F1) is 18.50.
PDL BioPharma (PDLI - Free Report) is a biopharmaceutical company focused on the research, development and commercialization of novel therapies for inflammation and autoimmune diseases, acute cardiac conditions and cancer.
PDL BioPharma’s earnings estimate for the current year has improved by 20.4% over the last 30 days. The forward price-to-earnings (P/E) ratio for the current financial year (F1) is 4.57. The stock has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Innoviva, Inc. (INVA - Free Report) is focused on the development, commercialization and financial management of bio-pharmaceuticals.
Innoviva has a Zacks Rank #2. The company has expected earnings growth of more than 100% for the current year. The forward price-to-earnings (P/E) ratio for the current financial year (F1) is 19.47.
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4 Biotech Stocks to Buy as Election Fever Rises
Despite recent events, Hillary Cinton maintains her lead over Trump and remains widely anticipated to win the race to the White House. Positions of both candidates on a variety of issues have been discussed with great detail. For instance, Clinton has continued to emphasize that the pharma industry and biotech companies in particular require greater regulation.
As a result of this stance and other issues, biotech stocks suffered losses throughout the year. However, the sector’s stocks enjoyed a rare day of gains on Monday, the strongest in months. This underlines the fact that the sector may continue to enjoy gains and enjoys strong long term potential. Adding select stocks from the sector to your portfolio could still make for a smart choice.
Clinton Protests Price Hikes
Rising drug prices first raised Clinton’s ire in Sep 2015. Her “price gouging” tweet led to a major sell-off thereby cutting short the phenomenal run of health care stocks, particularly in the biotech sector. While Clinton expressed concerns over the entire industry’s pricing practices, the tweet was primarily in response to Turing raising the price of Daraprim from $13.50 to $750 per pill in a single shot.
Matters have not been helped by Clinton’s recent tweet on a similar issue. Toward the end of August, a couple of U.S. senators raised questions about Mylan N.V. over pricing epinephrine auto-injector EpiPen. Making matter worse, Clinton posted a tweet, saying “EpiPens can be the difference between life and death. There's no justification for these price hikes." (Read: Forget Mylan, Buy These 3 Drug Stocks Instead)
Sector Still Sports Strengths
Primarily due to price related concerns, the iShares Nasdaq Biotechnology (IBB) was down 20% year-to-date at the beginning of Feb 2016. Even now the sector remains in the red and has lost around 15% since the start of the year. However, the biotech sector remains a good option for investors who are looking for investment opportunities which have little relationship with the direction the economy is taking.
Additionally, most of the sector’s losses came toward the beginning of the year. Now, stocks from this industry can only perform better. Though drug pricing will continue to be an important issue, other developments will also make their impact felt. Biosimilars are likely to gain prominence and provide the industry with a new avenue of growth.
Further, as valuations become more attractive the rest of the year could also witness the announcement of several mergers and acquisitions. Products which received approval last year are also likely to substantially add to revenues.
Our Choices
Despite the year’s reverses, biotech stocks continue to have inherent strengths. The worst could be over for the sector and it may now be poised to make a turnaround.
This is why it makes sense to pick biotech stocks at this point. We have narrowed down our search to the following stocks based on a good Zacks Rank and other relevant metrics.
ANI Pharmaceuticals, Inc. (ANIP - Free Report) is involved in developing, manufacturing and marketing generic and branded pharma products in the U.S.
ANI Pharmaceuticals has a Zacks Rank #1 (Strong Buy).The company has expected earnings growth of 55.5% for the current year. It has a P/E (F1) of 16.79.
Cambrex Corp. is a provider of a variety of products utilized in the development and commercialization of new and generic drugs across the world.
Cambrex has a Zacks Rank #1. The company has expected earnings growth of 39.8% for the current year. The forward price-to-earnings (P/E) ratio for the current financial year (F1) is 18.50.
PDL BioPharma (PDLI - Free Report) is a biopharmaceutical company focused on the research, development and commercialization of novel therapies for inflammation and autoimmune diseases, acute cardiac conditions and cancer.
PDL BioPharma’s earnings estimate for the current year has improved by 20.4% over the last 30 days. The forward price-to-earnings (P/E) ratio for the current financial year (F1) is 4.57. The stock has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Innoviva, Inc. (INVA - Free Report) is focused on the development, commercialization and financial management of bio-pharmaceuticals.
Innoviva has a Zacks Rank #2. The company has expected earnings growth of more than 100% for the current year. The forward price-to-earnings (P/E) ratio for the current financial year (F1) is 19.47.
Zacks' Best Investment Ideas for Long-Term Profit
Today you can gain access to long-term trades with double and triple-digit profit potential rarely available to the public. Starting now, you can look inside our stocks under $10, home run and value stock portfolios, plus more. Want a peek at this private information? Click here >>