Jim Cramer recently weighed in on the state of biotech after having identified a seemingly underlying trend that has resonated within the space, “Cramer has seen many confused money managers who are used to selling on news, because they assume that a stock has hit its high when it announces good news. Instead, these stocks defy common sense and continue to go higher afterward.”
Biotech comes into full focus as one of the most obvious sectors that this has occurred in. Edwards Lifesciences shot up $13 on Monday due in part to its new heart valve replacement system. In other reports, analysts like those at business inside have found that during the recent period of sell-off in the market, biotech stocks are actually rallying to the tune of roughly 2% on Thursday and 15% year to date.
It’s even been noted that since Janet Yellen warned about stretched stock valuations last year, Biotech stocks have rallied by more than 50%! For 2015 March Madness in the stock market could come with an injection of profits behind it. Oppenheimer’s John Stoltzfus wrote, “Dramatic developments in the sector along with M&A activity and a degree of animal spirits which from time to time flow through the category require investors to acknowledge the built-in risk along with the opportunities.”
Other biotech stocks to watch this year include Theravance Inc (NASDAQ:THRX), Keryx Biopharmaceuticals (NASDAQ:KERX), and Forward Pharma A/S (NASDAQ:FWP), all noted for the siginificant accumulation by several funds including that of billionaire Seth Klarman, Baupost Group with $28billion in assets under management.
Where do you stand?