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Between Oct. 5 and Nov. 11, one of the bellwether biotech exchange-traded funds fell 10.5%.
That's a correction, as defined by most market watchers.
And most investors – and their "enablers" on Wall Street – have shied away from biotech shares since. They're jittery.
In fact, I saw one august financial publication – the highly respected Investor's Business Daily – warn folks away from biotech in 2018 due to "median tenure of chief executives at large-cap biotech companies."
That's not just a stretch. It's a load of malarkey.
Here's the thing: If you want to double your money in 2018, you absolutely must invest in biotech.
That temporary dip in the iShares Nasdaq Biotechnology Index Fund ETF (Nasdaq: IBB) came after congressional Republicans ditched efforts to repeal and replace Obamacare. If there's one thing Wall Street hates, it's uncertainty.
As you might expect, Wall Street's panic led it to ignore some shares that have very bright futures – and are now trading at huge discounts.
So I've crunched the numbers – and done the research – and have identified three beaten-down biotech leaders that are poised to make huge comebacks throughout 2018.
I think you should put all three of these 2018 biotech comeback stocks on your "buy" list.
Especially the one that I believe will soar 110.5% in just 12 months…
Three Catalysts Behind Biotech
Let's get one thing cleared up right away. There's just no doubt that we as a nation will depend on biotech breakthroughs for years to come.
After all, the U.S. sector is worth $162.6 billion and is brimming with new drugs that will combat a wide range of diseases, often at the genetic level.
Here are three catalysts that I believe will drive biotech share prices in 2018 – and beyond…
- Aging America: There are 65 million U.S. baby boomers. As they age, they'll need all types of healthcare, including prescription drugs for heart disease, diabetes, strokes, high blood pressure, vision problems, Alzheimer's, cancer, and much more.
- Buyout Bonanza: The first four days of 2018 brought with them an $11 billion biotech buyout binge, with three major healthcare acquisitions making headlines. Last year, healthcare M&A totaled a disappointing $200 billion. Baker McKenzie expects that number to rise as much as 50% this year.
- Better Politics: As we go deeper into the Trump administration, the shroud over drug-price policy should lift. In fact, we can expect to see little or zero draconian anti-healthcare business policies coming out of the White House – and a faster-moving U.S. Food and Drug Administration approval process.
With the long-term outlook so bright, now is a great time to take advantage of the sector's recent correction. And to help you make the most money, I have compiled a list of three oversold biotech stocks set to soar in 2018.
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Each of these 2018 biotech comeback stocks is trading at big discount from the S&P 500 based on their forward earnings multiples. Right now, if you bought a broad market ETF, you would be getting a basket of stocks that trade at 19.5 times next year's earnings.
But the three I've uncovered have forward multiples ranging from just nine to 12 times 2018 estimated profits. That's why they are poised to soar 60.4%… 69.1%… and 110.5%.
Take a look…
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.
Excellent analysis