For Immediate Release
Chicago, IL – November 11, 2016 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Enzo Biochem Inc. (NYSE:(ENZ - Free Report) –Free Report),Exelixis, Inc. (NASDAQ:(EXEL - Free Report) –Free Report),Genmab A/S (OTCMKTS: (GNMSF - Free Report) –Free Report),Heska Corporation (NASDAQ:(HSKA - Free Report) –Free Report) and Incyte Corporation (NASDAQ:(INCY - Free Report) – Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Thursday’s Analyst Blog:
5 Top Biotech Stocks to Buy on Trump Victory
Tougher action on drug pricing by Democrat Hillary Clinton had clouded the outlook for biotech stocks this year. But, the startling win of Republican Donald Trump dissipated the fears. Also, biotech stocks recovered from a sharp sell-off witnessed over the past one year.
Trump’s plan to repeal Obamacare, free up cash currently held overseas for tax reasons along with his rhetoric on the campaign trail suggest that he will be more amicable toward the biotech industry. Taking such bullish trends into consideration, it will be judicious to invest in fundamentally sound biotech firms.
What Led to the Trump Win?
Though it came as a complete surprise, Trump won the required number of electoral votes in spite of Clinton’s lead by 170,000 popular votes. This makes it the second most closely contested presidential election in modern history after the famous Kennedy-Nixon clash of 1960.
So, what are the probable reasons for his victory? Trump won the presidency by riding an enormous wave of support among white working-class voters, which helped him triumph even in areas that supported Barack Obama in 2012. Coming to the figures, around 72% of white men without college degrees voted for Trump. His strength among white voters led to a commendable performance in the upper Midwest, while he also garnered considerable support from blacks and Hispanics.
Trump’s political ruthlessness was certainly appreciated by half of the electorate who has lately grown weary of “political correctness”. He sure had a way with his words from “Low Energy” Jeb Bush to “Little Marco” Rubio to “Lyin’ Ted” Cruz to “Crooked Hillary”. To top it, FBI’s unprecedented investigations on Clinton, did, help him secure the seat (read more: 6 Stocks to Profit from a Trump Presidency ).
Biotech Shares Soar
Trump’s victory fueled a market sell-off across the world while biotech stock indices braved it and scaled higher. The iShares NASDAQ Biotechnology Index soared 23.37 points or 8.9% to settle at 284.99 on Nov 9.
ISHARES NDQ BIO Price | ISHARES NDQ BIO Quote
The index jumped from a critical support level of 250 earlier this week, which is the low end of the trading range for the index for most of this year. Whenever the index has bounced back from such a level, it has invariably resulted in an average rally of 15% this year.
Trump Victory: Big for Biotech
Trump’s stance toward the biotech industry has been friendlier than that of Clinton. Trump remained silent on the drug pricing debate, which could mean fewer headwinds for the industry. Clinton, on the other hand, raised quite a hue and cry last year, vehemently criticizing the sharp hike in the price of Daraprim, used to treat parasitic infections.
Clinton suggested a wide range of policies to check drug prices and reduce healthcare payers’ drug costs. She also proposed reinvestment in research and development, and drug reimportation from countries that pay less for their medicine, something that didn’t bode well for the industry.
Meanwhile, Trump announced plans to “repeal and replace” the Affordable Care Act, better known as Obamacare. Even though the act helps purchase insurance plans at a subsidized rate, it does levy taxes on the industry that reduces profitability. A tax target is set, which will be collected from the drug industry on an annual basis. Next year, the target was expected to rise to $4 billion from $3 billion this year. This implies that a drug maker having 15% market share of all branded drug sales will have to pay around $600 million in taxes next year. If such a fee is nullified by repealing Obamacare, it will significantly boost earnings for biotech firms.
Trump’s business tax plan should also benefit biotech companies. He plans to trim business tax rate to 15% from 35%. The lower tax burden is expected to boost profits for large biotech companies. Such firms can, in the meantime, repatriate cash held overseas and only pay 10% tax on it, as per Trump’s policy. This extra cash can be further utilized for stock buybacks, boost earnings, pay dividends or invest in drug research.
5 Solid Choices
No one knows what the future has in store for the biotech industry. There might be a lot of turbulence in the industry till Trump formalizes his healthcare plan. But, the aforementioned bullish factors call for investing in solid biotech stocks. We have, thus, selected five biotech stocks that have tremendous financial strength and are also poised to grow in the near term, thanks to Trump presidency.
Such stocks boast a VGM score of ‘A’ or ‘B’. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners. Such stocks also flaunt a Zacks Rank #1 (Strong Buy) or #2 (Buy).
Enzo Biochem Inc. (NYSE:(ENZ - Free Report) – Free Report) is an integrated life science and biotechnology company. The company has a Zacks Rank #2 and a VGM Score of ‘A’. The Zacks Consensus Estimate for its current year earnings improved 5.9% over the last 60 days. The company’s expected growth rate for the current year is 15%. Following Trump’s victory, the company’s shares surged 6.3% on Nov 9.
Exelixis, Inc. (NASDAQ:(EXEL - Free Report) – Free Report) is a biopharmaceutical company that engages in the discovery, development, and commercialization of new medicines. The company has a Zacks Rank #2 and a VGM Score of ‘B’. The Zacks Consensus Estimate for its current year earnings rose 31.5% over the last 60 days. The company’s expected growth rate for the current year is 34%. After Trump’s victory, the company’s shares soared 20.5% on Nov 9.
Genmab A/S (OTCMKTS: (GNMSF - Free Report) – Free Report) is a biotech company that develops antibody therapeutics for the treatment of cancer internationally including the U.S. The company has a Zacks Rank #2 and a VGM Score of ‘B’. The Zacks Consensus Estimate for its current year earnings surged 109.8% over the last 60 days. The company’s expected growth rate for the next year is a whopping 224.3%. You can see the complete list of today’s Zacks #1 Rank stocks here .
Heska Corporation (NASDAQ:(HSKA - Free Report) – Free Report) manufactures, markets, sells, and supports veterinary products. The company sports a Zacks Rank #1 and a VGM Score of ‘B’. The Zacks Consensus Estimate for its current year earnings climbed 19.5% over the last 60 days. The company’s expected growth rate for the current year is 82.4%. Following Trump’s victory, the company’s shares gained almost 3% on Nov 9.
Incyte Corporation (NASDAQ:(INCY - Free Report) – Free Report) focuses on the discovery, development, and commercialization of proprietary therapeutics in oncology in the United States and internationally. The company has a Zacks Rank #2 and a VGM Score of ‘B’. The Zacks Consensus Estimate for its current year earnings scaled more than 200% over the last 60 days. The company’s expected growth rate for the next year is a staggering 163%. After the Trump win, the company’s shares rallied almost 13% on Nov 9.
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 >>
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Get the full Report on ENZ - FREE
Get the full Report on EXEL - FREE
Get the full Report on GNMSF - FREE
Get the full Report on HSKA - FREE
Get the full Report on INCY - FREE
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.
This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.