|
|
The largest tech stocks, Facebook (FB, Rated “A-“), Amazon (AMZN, Rated “C”), Netflix (NFLX, Rated “C+”) and others in the acronym FANGMAN have become household names by getting all of the attention in the media.
Face it, it’s hard to have any investment type of conversations without mentioning a few of them, even if it’s with friends and family.
Why not, with these kinds of returns, there’s a lot of fodder to talk about:
But the question is, with the greater market up just 9% YTD comparatively, how long can that outperformance continue?
The truth is that those companies are innovating and are offering unique, game changing propositions for its customers. But, they are also being recognized and rewarded for it by market value appreciation.
I am not saying those are bad investments, but I am an investor that likes to buy low and sell high, rather than buy high and sell higher (a dangerous bubble inducing game).
I like to find opportunities that may not be getting as much recognition but deserve to be rewarded.
And in that spirit, there’s another sector that’s also innovating with game changing propositions, or new drugs, for its customers – that’s the biotech’s.
Undervalued Biotech Stocks Breaking Out…Here are the Top Rated Winners
Last week I pointed out the chart showing the iShares Nasdaq Biotechnology (IBB, Rated “C”) breaking out. But unlike its fellow tech heavy FANGMAN stocks, this sector is nowhere near new highs, and despite breaking out 6.5% to its current level, it’s still 20% off its previous highs.
So I decided to create a screen to look at which companies in the sector had ratings improvement, indicating an improvement in our Model’s prospects.
These are B- or better rated stocks in the Pharmaceuticals, Biotechnology and Life Sciences Sector.
I awarded companies points based on relative quantiles for distance from 52 week highs (the lower the better), YTD Ratings improvement (higher the better), and price change over the last week (higher the better) – here’s the winners:
These names had been beaten up after the tweet from then Presidential Candidate Hillary Clinton regarding drug prices and uncertainty regards to healthcare coverage and policy set in.
Well, with less rhetoric in their way, and healthcare reform still uncertain, these stocks in the biotech space have started to pick up steam and could continue to catch-up.
This list highlights some names that could make researching beaten down quality names in the sector a little easier.
Best,
Mandeep
Small Cap Edition, By Mandeep Rai, Senior Analyst Mandeep Rai has more than 15 years of investing experience, working as both a stock and credit analyst. At Weiss Ratings, he researches and evaluates financial and economic themes, and makes decisions on when to buy or sell specific shares for the Top Stocks Under $10 portfolio. |
