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Can anyone explain why healthcare has been hurting so badly (no pun intended) for the last 6 months? Is it just the market's perception that it was time for a correction after a long runup?
Biotech Related Biotech Selloff, EVENTIDE FUNDS Semi-Annual Report 31 December 2015 The Gilead Fund and Healthcare & Life Sciences Fund are both exposed to the biotech sector, which normally is not correlated to the broader economy. The futures of companies in the biotech industry are dependent on company-specific pipelines of new drugs. Despite the worst selloff in biotech history, the fundamentals of the industry remain positive. The decline may be due in part to the 2015 drug-pricing scare in which rising drug prices became a political issue. In addition, biotech normally experiences one large selloff every year. But, most likely, the decline is due to a broad flight from risk among investors, and biotech is risky. As a result, we believe investors are pricing companies far below a rational consideration of value. While price-to-earnings (“PE”) ratios aren’t normally a useful metric in the biotech sector, given many companies are pre-earnings, the PE of the four largest companies show them trading below the PE of the S&P 500. Normally they trade much higher, as earnings growth rates in the sector typically outperform estimates. Small-cap biotech companies have plenty of cash — enough to last them for an average of 6.6 years before needing additional investment. That’s plenty of time to produce new drugs, and the industry has many exciting new drugs in the pipeline. Finally, the regulatory environment is positive, with officials approving more new drugs every year. In other words, the fundamentals in the sector are positive. EVENTIDE FUNDS Semi-Annual Report 31 December 2015 https://materials.proxyvote.com/Approved/MC5611/20160129/SAR_275117.PDF 1 Day Y T D FBIOX -4.08 -31.06 IBB -3.30 ( nav) -22.26 ETNHX -4.64 -27.50 PRHSX -1.39 -13.40 M* Health: Total Returns Y T D Ave -14.81 http://news.morningstar.com/fund-category-returns/health/$FOCA$SH.aspx IBB: Political Posturing Sell-Off Presents Buying Opportunity Mar. 8, 2016 4:49 PM ET http://seekingalpha.com/article/3956759-ibb-political-posturing-sell-presents-buying-opportunity Vice President Joe Biden dropped in to Tutta Bella’s Westlake Avenue location during a visit to Seattle on Monday and ordered four Neapolitan pies to go.
When the conservative Vanguard h/c fund reached the stratosphere with a P/E over 30 (by Vanguard's calculation), the handwriting seemed to be on the wall, in neon colors.
Comments
Biotech Selloff, EVENTIDE FUNDS Semi-Annual Report 31 December 2015
The Gilead Fund and Healthcare & Life Sciences Fund are both exposed to the biotech sector,
which normally is not correlated to the broader economy. The futures of companies in the
biotech industry are dependent on company-specific pipelines of new drugs.
Despite the worst selloff in biotech history, the fundamentals of the industry remain positive. The
decline may be due in part to the 2015 drug-pricing scare in which rising drug prices became a
political issue. In addition, biotech normally experiences one large selloff every year. But, most
likely, the decline is due to a broad flight from risk among investors, and biotech is risky.
As a result, we believe investors are pricing companies far below a rational consideration of value.
While price-to-earnings (“PE”) ratios aren’t normally a useful metric in the biotech sector, given
many companies are pre-earnings, the PE of the four largest companies show them trading
below the PE of the S&P 500. Normally they trade much higher, as earnings growth rates in the
sector typically outperform estimates. Small-cap biotech companies have plenty of cash —
enough to last them for an average of 6.6 years before needing additional investment. That’s
plenty of time to produce new drugs, and the industry has many exciting new drugs in the
pipeline. Finally, the regulatory environment is positive, with officials approving more new drugs
every year. In other words, the fundamentals in the sector are positive.
EVENTIDE FUNDS Semi-Annual Report 31 December 2015
https://materials.proxyvote.com/Approved/MC5611/20160129/SAR_275117.PDF
1 Day Y T D
FBIOX -4.08 -31.06
IBB -3.30 ( nav) -22.26
ETNHX -4.64 -27.50
PRHSX -1.39 -13.40
M* Health: Total Returns Y T D Ave -14.81
http://news.morningstar.com/fund-category-returns/health/$FOCA$SH.aspx
IBB: Political Posturing Sell-Off Presents Buying Opportunity
Mar. 8, 2016 4:49 PM ET
http://seekingalpha.com/article/3956759-ibb-political-posturing-sell-presents-buying-opportunity
Vice President Joe Biden dropped in to Tutta Bella’s Westlake Avenue location during a visit to Seattle on Monday and ordered four Neapolitan pies to go.
Biden was in Seattle to tour a research facility to promote a $1 billion proposal to cure cancer, announced in President Obama’s January State of the Union address.
http://www.pmq.com/March-2016/Vice-President-Orders-4-Pies-to-Go-from-Seattle-Pizzeria/
Because I bought some GILD six months ago. I thought that I had warned all of you before I did that.