We have almost a perfect storm of negativity to hit the sector to start the week- a week that people were already worried about with the slew of earnings that will be coming. There are a plethora of major mergers throughout the market but none in biotech. The M&A thesis has been a core to […]
October 21 Biotech Update
Clearly the sector did not turn the corner after the presidential debate even though it should have assuaged concerns over the importance of drug pricing to the candidates. The sector had a small recovery and with the positive news released last night, this should have been a nice tailwind. Any sort of early pop has […]
Dave Trading – October Edition – Bargain Hunting Time?
*** David Sobek is a disciplined value investor. Using models, research, and fundamental data, David devises a value for biotech stocks, buys when significantly undervalued, and sells when significantly overvalued.*** As a reminder, this is my personal guide. You can alter it in accordance with your risk tolerance. >3 Standard deviations – No position 2-3 […]
October 19 Biotech Update
There is really nothing to talk about today with a lack of news. I suspect we will be weak into the final debate and stretch run of the campaign. Recent polls are showing the potential of a wave election which would at the very least give the democrats the Senate with an increasing chance of […]
October 18 Biotech Update
It is still not great out there for the sector but yesterday was not awful, which I guess is an improvement. Perhaps we have reached a short term bottom and whether this is a longer term bottom I think depends on how comfortable investors are about the election. We clearly built in some expectation for […]
Catatonic Economics – No one is talking about the greatest risk to America
Financial markets talk about a lot of headwinds to the economy. China devaluation, negative S&P earnings, presidential race, central bank actions, European banking problems, Japan, oil, etc. One that should be frontline news… more than the Trump tape, more than Kim Kardashian being (fake?) mugged, more than a backup QB kneeling for the national anthem. […]
October 17 Biotech Update
The sector continues to weaken but still remains above the 200 day moving average. It seems to me that some panic is starting to set in as the sector cannot slow the bleeding. The selling appears to be relentless with nothing acting as support. As long as we stay above the 200 day, I am […]
October 14 Biotech Update
The sector may be due for a snap back (with the broader market) but I still get the sense that people are worried. My prevailing thought has been that this was related to both earnings jitters and a set of negative data. I still think those are a factor but I also wonder if the […]
October 12 Biotech Update
It looks like fears are starting to take hold in the sector. I suspect it is centered on revenues coming up short and this then causes everyone to focus on the bad news that hits the tape. As I said before, I do think earnings will be weak for some large caps and this will […]
October 11 Biotech Update
Looks like we are going to move from good to bad with earnings warnings likely to weigh on the sector today. I think there was always some concern about earnings heading into the upcoming reports and this has only been exacerbated today. 1. In terms of the earnings warnings that came out (ILMN and HZNP), […]
October 10 Biotech Update
It is a solid positive reaction to ESMO across the sector (with some notable exceptions). While there are number of potential topics, I want to focus on one as it has very broad implications that we need to watch not just in the near term but longer term. 1. BMY front line data were an […]
October 7 Biotech Update
There have been some interesting moves and news since Wednesday but even looking at the sector today, the volumes seem a little weak in most names. As such, there are some moves that seem meaningful in individual names with high volume but I am not reading any of those moves (or the other low volume […]
October 5 Biotech Update
I think the word of the week is drift. Sure there were some moves within the markets or sector but for the most part this is a low volume drift. We are closing in on a month from Election Day, so I suspect nobody wants to commit a lot of capital ahead of the election. […]
October 4 Biotech Update
Today is certainly a better start. It seems that the sector is trading to a certain extent on macro issues with the DB concerns leading to risk on versus risk off action. The sector will always be a victim to large risk off moves, so if the DB situation resolves I would not be surprised […]
October 3 Biotech Update
Not the best start to the week for the market or sector but there really seems to be little conviction on this move. So we meander lower and the sector moves with the broader market. I think the market it getting closer to its next big move as we are closing in on four months […]
September 30 Biotech Update
Well, a couple days can make a difference. The sector has been hit by renewed pricing concerns (people suddenly realize that voters in California might vote to lower their drug prices), some negative biotech headlines, and a broader market that suddenly thinks we are having another Lehman moment (probably the 20th Lehman moment since the […]
September 28 Biotech Update
The sector continues to do well but there seems to be a bifurcation occurring where the SMID are outperforming the large caps. Usually when investors come back into a sector they start higher on the capital scale as those are typically cash flow positive, reasonable valuations, and a safer way to increase exposure. This does […]
September 27 Biotech Update
We got some interesting biotech news and I thought there would be only one to talk about but we have three I want to touch on so I will save general market commentary for another day as nothing has changed there. 1. The first news is the interim ZUMA-1 data that was reported by KITE. […]
September 26 Biotech Update
Nothing really to move the sector to start the week, so it looks like we sell off with the rest of the market. This price action does not change my thesis that the sector’s path of least resistance is higher for the rest of the year but given the run we do likely need news […]
September 23 Biotech Update
The sector seems to be quieting down a little and perhaps a little bit of consolidation of the recent move is in the cards. All in all, however, it seems like a productive week for the sector and confirms my base case that the likely path moving forward is higher (with the obvious pullbacks sprinkle […]
