I Don’t Know About You, But I’m Feeling These 22 Biotech Stocks
The market is in a transitional phase as we await earnings.
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Despite some sensationalistic headlines about the resumption of hostilities in Iran, the market reaction is fairly mild. Many market participants are tired of the drama and lately the reaction to it has been less intense. Breadth is poor, with just 30% of stocks in the green. The DJIA and the Russell 2000 are leading to the downside.
The bigger problem for the market right now is a lack of positive catalysts. The Iran situation doesn’t help, but now that the mechanical rebalancing of indexes and the SpaceX (SPCX) IPO are in the rearview mirror, we need some good economic or fundamental news to create movement.
On the economic front, the inflation issue only gets worse as the Iran situation drags out, and the recent action in bonds is a concern. The massive AI capex spending is not slowing down and that is a key driver of inflationary pressures.
On the fundamental side, the entire AI trade is in flux. The semiconductor sector had blowout reports and still looks cheap on a PE/growth basis, but there is a growing belief that competitive pressures will come into play to deal with the monopoly pricing that the group has enjoyed. The hyperscalers have benefited from that belief that there still are significant margin pressures and concerns about AI profitability.
The rotation play has been working extremely well, but it is now extended in places and there may be some positioning pressures as we move into earnings season.
My client accounts at Hammerhead Financial Strategies are still very heavily weighted in biotechnology with names like Abivax (ABVX), Cullinan Therapeutics (CGEM), ClearPoint Neuro (CLPT), Compass Pathways (CMPS), Delcath Systems (DCTH), Definium Therapeutics (DFTX), Emergent BioSolutions (EBS), Hims & Hers Health (HIMS), Harrow (HROW), Indivior Pharmaceuticals (INDV), Neurocrine Biosciences (NBIX), NeurAxis (NRXS), Ocular Therapeutix (OCUL), Precigen (PGEN), uniQure (QURE), Revolution Medicines (RVMD), TG Therapeutics (TGTX), Tango Therapeutics (TNGX), The Oncology Institute (TOI), Travere Therapeutics (TVTX), Vir Biotechnology (VIR), and Xeris Biopharma (XERS).
My position sizes in these names vary tremendously, but they are all stocks that I’m actively trading and will adjust as conditions develop.
At the time of publication, Rev Shark was long ABVX, CGEM, CLPT, CMPS, DCTH, DFTX, EBS, HIMS, HROW, INDV, NBIX, NRXS, OCUL, PGEN, QURE, RVMD, TGTX, TNGX, TOI, TVTX, VIR, and XERS.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider several of the names mentioned to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.
