The budding recovery in the S&P biotech index is likely to gather steam. Big pharma is desperate to replenish its drug pipeline, putting biotech equities back into play following a drawn out de-rating phase. This phenomenon is not…

With the broad market breaking out to new highs courtesy of flush liquidity conditions and rising risk appetite, the momentum-driven biotech group stands an excellent change of reclaiming previous relative performance highs. We upgraded…

The combination of biotech stabilization and a health care facilities plateau argues for profit taking in our long/short trade between the two groups. We had exploited the valuation mismatch because hospital profit prospects were far…

A gap has opened between the Nasdaq and S&P biotech indices, suggesting broad-based selling has reached a stage where discrimination is occurring. The former is infused with concept stage companies with no revenue or earnings, while…

The health care sector is poised to resume its bull market, but the character of the rally will change. Sell hospitals and buy biotech.

The oversold bounce is not supported by policy or profits, and should be treated as countertrend. Lift machinery to neutral and differentiate between pharmaceuticals and the unwinding of the biotech mania.

The previous Insight showed that S&P pharmaceutical index outperformance is well supported by both endogenous and exogenous forces. The same is not true for the riskier biotech space. As discussed in previous research, biotech…

Pharmaceutical stocks have broken from their correlation with biotech stocks, and we expected this divergence to be sustained. Pharmaceutical profits remain one of the few bright spots within the corporate sector. Drug demand continues…