Biotech Values

[Titan V]

Why Biotech is Getting Killed…And Why It Will Bounce Back
http://blogs.barrons.com/stockstowatchtoday/2016/12/08/why-biotech-is-getting-killed-and-why-it-will-bounce-back/

RBC’s Michael Yee and team explain why biotech stocks have been getting killed (Hint: It’s not just Donald Trump)…and why they should bounce back:

The primary issues we see going on and causing a lack of recent performance are: (1) generalists are busy buying financials, industrials, and stocks directly impacted by near-term proposals for infrastructure and rising interest rates, and biotech does not directly benefit from either; (2) generalists are on the sidelines on biotech and healthcare itself has had some setbacks with Eli Lilly (LLY) failed Alzheimer’s study, and big stock selloffs in Teva Pharmaceutical Industries (TEVA), Medtronic (MDT)…etc after earnings, which hasn’t inspired any added love for health care, (3) sentiment has marginally improved in biotech post the election but there are still some fears on uncertainty about govt intervention on drug pricing and Medicare reform or cuts via HHS Secretary Tom Price’s recent budget proposals (especially with Trump quoted today saying “I’m going to bring down drug prices… I don’t like what has happened with drug prices”, which worries broader investors and the market; (4) perception of no major near-term catalysts in biotech other than “it’s cheap” and we need much more M&A to get the stocks rallying again…