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If you had bought Biogen Idec Inc. (Nasdaq: BIIB) during the depths of this spring's biotech sell-off, you could have been sitting on peak gains of 28.3%.
If you'd picked up Celgene Corp. (Nasdaq: CELG) at the time, you'd be doing even better, with peak gains of 40.9%.
And if you had been really brave, you could have picked up shares of the company that – through a series of Washington political shenanigans – was the "cause" of the sell-off. And you'd be doing very well, indeed.
Since April 11, Gilead Sciences Inc. (Nasdaq: GILD) has scored peak gains of a whopping 74.2% – or more than 175% annualized gains.
Some investors don't want to risk it all during a sell-off by picking and choosing among stocks getting slammed – but they still do want to take advantage of the growth hot biotech stocks offer.
So today I want to tell you about a conservative approach to investing.
However, though this investment is conservative, it still offers big money through biotech.
In fact, it's yielded annualized gains of more than 60% so far this year – and there's plenty of upside left to come…
Biotech Stocks to Buy: The Best Pick for Risk-Tolerant Investors
Investors who picked up shares of Gilead before they fully recovered have made 38.7% gains since I recommended GILD on June 19.
Not bad for a company that Washington politicians said was emblematic of everything wrong with drug companies just a few months ago.
Gilead, a Foster City, Calif.-based biotech that's been around since 1987, received approval in December for Sovaldi, its new hepatitis C treatment.
Sovaldi, I'm telling you now, will go down as one of the most successful drugs ever released.
Ordinarily, the release of an extremely promising drug would be enough to ignite a stock to new levels. And that was in the works until Washington politics and a classic Wall Street overreaction derailed Gilead's success.
Back in March, several influential U.S. House members criticized Sovaldi's $84,000 sticker price. And Gilead sold off, dropping from around $80 to less than $64 in less than a month.
And much of the biotech sector soon followed. The Nasdaq Biotechnology Index sank 22% in about six weeks, hurting everything from tiny startups to huge mutual funds.
At the time, I steadfastly believed that Gilead and the rest of the sector would quickly recover. In other words, biotech was brimming with new buying opportunities.
But again, you have to be a bit of a risk taker to pick stocks during such a tumultuous time.
With regard to Gilead, Wall Street feared that, as part of the 2014 midterm elections, Congress might put price restrictions on Sovaldi or otherwise go after the biotech sector.
But I quickly determined there was no way Congress would take action against Gilead or any other pharmaceutical firm based on the price of a new drug.
About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.