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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…
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About the Author
Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.
Excellent analysis