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This Says Our Favorite Biotech Is Off to the Races

Shares of a promising biotech we recommended back in February 2013 – jumped as much as 27% to a three-month high of $14.20 yesterday after the company said a new cancer drug met its main goal in a midstage clinical trial.

Its shares backtracked a bit as the day progressed but still closed 17.6% higher for the session. These shares have advanced 361% since we first told you about them. The stock has generated a peak gain of 456%, making it one of the 31 recommendations we’ve made to you that have doubled or better since we launched Private Briefing in August 2011. (More on that later…)

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    Possible Tax Changes for 2013 Trigger Stock Selling

    Anxiety about tax changes for 2013 among investors holding high-yielding dividend-paying stocks has led to a selloff, driving down stock prices.

    It's almost certain tax rates on dividend payments will rise, possibly by as much 43.4% for those in upper income brackets.

    Some investors could be spared from the dividend tax, depending on the outcome of fiscal cliff negotiations. U.S. President Barack Obama has said he wants to increase the tax on those earning $400,000 or more, while Republicans have suggested raising the tax on those earning $1 million or more.

    But even if you're not hit by higher dividend taxes, you could see the prices of stocks you own plunge because of a selloff by investors worried about the higher tax rates.

    Two sectors - telecoms and utilities - have been especially hard hit.

    Utilities could be the worst-performing sector in 2012, up only 2% through November compared with the Standard & Poor's 500 gain of 15%. Telecoms have slipped 5% to 6% just in the past few months.

    Some larger investors in the telecoms sector may have been simply riding momentum and quickly sold out.

    Sam Stovall, chief equity strategist at S&P Capital IQ, told CNBC "some of these groups will be and have been beaten up because a lot of these investors were riding the momentum wave for high yielders."

    But the selling has been pretty consistent in recent months. From August-November, the top 20% of dividend-paying companies in the S&P 500 underperformed the index by about 3%.

    Vadim Zlotnikov, chief market strategist at AllianceBernstein, told the Financial Times, "You can't argue that the threat of higher taxes is not important to investors."

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  • 2012 tax brackets