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Monday, 27 April 2015

Market Caution - US Biotech Stocks Look OverHeated

  
ARE BIOTECH STOCKS IN A BUBBLE?

   


ARE BIOTECH STOCKS IN A BUBBLE?



 This is a question that is being asked. According to an article by Bloomberg (Biotech Index in Nosebleed Territory - Up 500% In 4-years, Trades At 10X Revenues – Bloomberg Business, March 8, 2015) the 269 Biotech companies that are listed on the NASDAQ are up more than 500% in the past four years. The Biotech companies have the biggest weighting on the NASDAQ at 11.2%.

A 500% gain is impressive. The NASDAQ Biotechnology Index (NBI) is up a more modest 338%. The TSX Health Care Index (THC) is up an even more modest 187% in the same period.  It appears that some of the really high flyers are not even in the NBI. As to the THC, it has been led primarily by one stock – Valeant Pharmaceutical (VRX-TSX). VRX is up 665% in the same period. Read More.

Be Extra  Cautious As Rumors Began Last Year 



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