When evaluating biotech stocks, many key indicators that work for other industries - e.g. price-to-earnings ratio, profit margin, revenue-per-share - often don't apply.
Biotechnology is tech's fastest-growing sector. In fact, there are more than 100 biotech companies set to go public in 2015.
Of those 100 IPOs, 60 are expected to launch before April 1. So you have to move fast to ride this $320 billion biotech wave.
Those IPOs are all but certain to keep the biotech bull market going through the year. Biotech stocks have soared 290% in the past five years. That's more than triple the S&P's 88%.
Our 2015 stock picks show us two trends.
Precious metals are still surging. And now, biotech stocks are coming into 2015 hot.
Editor's Note: We're sharing this Private Briefing with you because it contains a pick that's put Bill's readers up as much as 444% since he first recommended the stock...
Shares of blood-cancer drugmaker Pharmacyclics Inc. rocketed as much as 22% last Tuesday after the company exhilarated investors by forecasting that sales of its key drug would double this year.
We weren't surprised by this, of course.
But even more important was that Private Briefing readers weren't, either.
In a Private Briefing report back in early December, we said the Pharmacyclics blood-cancer drug Imbruvica (ibrutinib) was well on its way to becoming the blockbuster we predicted when we first recommended shares of the Sunnyvale, Calif.-based biotech back in April 2012.
That "call" was right on target.
Late last Monday, after the close of trading, Pharmacyclics said net-product revenue for Imbruvica for full-year 2014 would come in at $492 million. That would include sales of about $185 million in the fourth quarter alone - a hefty "sequential" (quarter-to-quarter) jump of 31%.
But here's the real stunner: For 2015, the company is looking at sales to more than double and reach $1 billion.
For those who want the actual numbers, that's a gain of 103%.
Imbruvica, you see, is shaping up to be the very blockbuster we told you it would be.
And that bodes well for Pharmacyclics shares.
Pharmaceutical stocks can plummet for myriad reasons: loss of funding, lawsuits, poor clinical trials.
It's a risky sector to get yourself involved in - one with big rewards. But, where there are big rewards, there are also big losses.
Biotech stocks to buy in 2015: Biotech was one of the most profitable sectors this year. Through Dec. 18, the S&P 500 Biotechnology Index is up 43.6% in 2014, and the Nasdaq Biotechnology Index is up 36.9%.
Those gains are three to six times as big as the broader markets'. In 2014 through Dec. 18, the Dow Jones Industrial Average is up just 6.1%, the S&P 500 10.3%, and the Nasdaq 12.8%.
When researching the best biotech stocks to buy, investors often look for companies that will cure terrible, chronic diseases.
Until recently, these biotech stocks have been elusive. But now that's changing - thanks to an industry known as personalized medicine.
In his 20 years' experience, Tremblay has covered every type of biotech stock and company on the market. And when he talks about the personalized medicine field, he describes the treatments as "miraculous." Here's why...
Today I want to reintroduce you to a biotech stock that Wall Street has been pricing as though it were dead money.
This biotech company recently filed a stellar earnings report. But those earnings were slightly off analyst expectations, and the share price dipped.
Modern medicine, for all of its sophisticated drugs, complex gadgets, and amazing surgical procedures, rarely cures anything. It treats. It manages. It postpones the inevitable.
But return a patient to normal, optimal health?
So when an innovation comes along that can effect a complete and permanent remission of disease or restore damaged organs to a pristine state, it should cause your keenest investing instincts to perk up and pay attention...
[Editor’s Note: We’re sharing this edition of Private Briefing with you because the two profit-doublers Bill is looking at right now are about to break out, thanks to a little-understood catalyst that heralds big share price hikes. Here’s Bill…]
When I earned my MBA from the Rochester Institute of Technology back in the mid-1990s, my focus was finance and investing.
But it was a management professor who clued me in to some of the best ways to "look past the numbers" and understand what really makes a big company tick.
The professor, Janet C. Barnard, retired a few years back and, sadly, passed away in 2012.
The talks that she and I had were invigorating "mini-lessons" - which is why we were still having them years after I tacked my graduate-degree diploma to my office wall.
I often "shared" those lessons with my readers - quoting the management professor in stories I wrote back during my days at The Baltimore Sun, as well as in columns I've written for you folks here at Money Map Press.
A big grin lit up my face when I opened my trading screens recently.
I was looking at the chart for Ekso Bionics. The company was trading at right around $1.81 per share at midday on Monday.
That means it was close to a double from where I initially recommended it as our first human augmentation target to members of my Total Wealth research service.
Ekso is still a great buy, which is why I'm recommending it for Money Morning, too. There's plenty of room for this company to double - again.
There are more than 1,000 biotech companies in North America alone. They cover a wide range of sectors including pharmaceuticals, biologics, generics, and medical devices.
But finding the right stocks in such a broad industry is no easy task.
That's why we've targeted the best biotech ETF to buy now. It offers investors an excellent way to play the entire industry, without having to pick a specific sector.
The number of companies racing to find an Ebola treatment is increasing. All drugs remain in the testing stage, but that hasn't stopped investors from piling into these "Ebola stocks."
Chimerix (Nasdaq: CMRX) climbed 5% Monday on reports that the Ebola patient in Dallas is being treated with its drug, brincidofovir.
It's a common thought that investing in biotech stocks is just too risky for the average investor - but that's not the case.
It's true that biotechnology stocks can be very volatile - especially when companies have developmental drugs going through clinical trials - so they aren't the right stocks for every investor. But when investors are able to limit risk, they can find their portfolio's biggest profits from biotech.
Money Morning's BioScience Investment Strategist Ernie Tremblay recommends investors use this one simple strategy when investing in biotech.
On August 29, 2012, shares of Keryx Biopharmaceuticals - a company focused on pharmaceutical products for patients with renal disease - closed for the day's session at $2.06. Exactly two years later, on August 29, 2014, the same stock closed at $18.19./
That's right: Investors made a 780% profit over their original position, and it looked like the price per share (PPS) was destined to climb considerably higher.
In fact, analysts had set their average first-year target for the stock at about $23. And there was every reason to believe Keryx would reach and break through that target after the FDA approved it for marketing in the United States on its PDUFA date, set for September 7.
But then something odd happened...
The FDA rendered its decision early, on September 5, and although the news was good - KERX's drug had been approved - the stock fell more than 11% by the session opening the following Monday and continued falling over the next few weeks - giving traders today an opportunity to take advantage of the situation and make huge profits.