Stocks have rebounded strongly over the last couple of weeks as the geopolitical bugaboos that were bothering investors have ratcheted down a few notches.
ISIS is on its heels in Iraq thanks to U.S. airpower. Russia seems to be backing down as separatists in eastern Ukraine come under heavy pressure from an increasingly offensive Ukrainian military.
Even concerns about a sooner-than-expected interest-rate hike from the Federal Reserve have fallen by the wayside.
Not all sectors have participated equally however, with biotech stocks leading the rest of the market to the upside over the last three weeks. Here are five hot stocks in the group that are worth checking out:
Red-Hot Biotech Stocks – Arrowhead Research (ARWR)
Click to Enlarge Arrowhead Research (ARWR) is a biopharma company focused on creating hepatitis B treatments using what’s known as the RNA interference mechanism. (In plain English, this is about silencing disease-causing genes to take out bad cells while protecting healthy tissue.)
Arrowhead also is developing an anti-obesity treatment that selectively destroys the blood supply that helps unhealthy fat cells grow.
Shares are rising up and out of a consolidation base going back to April and could be good for a test of its March highs — which would be worth an 80% move from here.
Shares are up nearly 6% since I recommended them to my Edge Letter clients on Aug. 15.
Red-Hot Biotech Stocks – Novavax (NVAX)
Click to Enlarge Novavax (NVAX) is a clinical-stage biopharma company developing nanoparticle vaccines. The company’s clinical pipeline is targeted toward conditions that cause upper-respiratory problems, such the familiar influenza virus as well as what’s known as the respiratory syncytial virus (RSV), which plagues infants and children.
NVAX’s chart looks very similar to ARWR’s and looks to be emerging from a multimonth basing pattern. Shares are up about 3% since I recommended Novavax to clients.
Red-Hot Biotech Stocks – Xoma (XOMA)
XOMA shares lost more than 63% of their value during the March-May biotech wipeout but have since been stabilizing near $4 per share. Even a small move to test its 200-day moving average would be worth a 20% move from here.
Shares of XOMA are up more than 3% since I recommended them to clients.
Red-Hot Biotech Stocks – NewLink Genetics (NLNK)
Click to Enlarge NewLink Genetics (NLNK) is a biopharma company developing immunotherapeutic treatments for cancer, specifically targeting lung cancer, pancreatic cancer, melanoma, prostate cancer and breast cancer. The most advanced therapy in its pipeline is a treatment for pancreatic cancer that encourages the body’s T-cells to recognize and attack cancer cells.
A retest of the late February high would be worth a 90%-plus gain from here. Shares are up nearly 3% since I recommended them last week.
Red-Hot Biotech Stocks – WuXi PharmaTech (WX)
Click to Enlarge WuXi PharmaTech (WX) is a biotech and biopharma research and manufacturing services company that helps drug developers create, test, and produce new treatments. It doesn’t development treatments in house but provides the infrastructure scientists, researchers, and entrepreneurs need to get a new treatment or therapy on the road to reality.
The advantage to using WX is that startups benefit from lower capital costs and faster R&D progress.
WX is a little less dynamic than the other names here, but should be good for a 10% gain as it returns to its February high. Shares are up nearly 4% since I recommended WX to my clients.