There is a time and a season for everything. You can certainly see that in the ebb and flow of the stock market as emotions swing from fear to greed and back again.We’ve seen the cycle of greed start anew this week as stocks have rebounded powerfully from their recent lows. It started with small-cap stocks, as traders newly aware that Armageddon wasn’t approaching, scrambled into the riskiest, most shorted stocks first to get maximum exposure to the rebound.
That greed is continuing now, as “high beta” areas like semiconductor and biotech stocks pop higher. Investors are back on the hunt for market-beating returns.
Here’s a list of five biotech stocks I’ve recommended to Edge subscribers to get exposure to this scramble into the riskiest areas of the market.
Biotech Stocks: CytRx (CYTR)
CytRx (CYTR) is a biopharmaceutical research and development company focused on cancer-fighting treatments. Its development portfolio includes Aldoxorubicin, a variation of a commonly prescribed chemotherapeutic agent that uses the low pH environment inside tumors to target the drug, like a guided missile, where it’s needed while minimizing damage to surrounding healthy tissue.
Biotech Stocks: Pacific Biosciences (PACB)
Pacific Biosciences (PACB) specializes in DNA sequencing technologies for a variety of applications from fighting diseases to creating healthier, more productive crops. The company’s revenues are growing fast, with PACB stock expected to post $61 million next year — up from $28 million in 2013.
Biotech Stocks: Pozen (POZN)
Pozen (POZN) is a pharmaceutical development company that, unlike much of the industry, tries to do as much of the work in house as it can. The result has been rapid progress that resulted in two self-invested products going to market in two years. Current licensed products include a migraine medication (Treximet) and an anti-arthritis treatment (VIMOVO). Its future efforts are focused on harnessing the ability of aspirin to treat cardiovascular disease and osteoarthritis by reducing its gastrointestinal damage.
The company is profitable, with earnings of 68 cents per share of POZN stock expected this year and 96 cents expected for 2015. Those numbers are up from a loss of 55 cents per share in 2013.
Biotech Stocks: Catalyst Pharmaceutical Partners (CPRX)
Catalyst Pharmaceutical Partners (CPRX) is a development-stage company focused on the creation of drugs for diseases and disorders of the nervous system such as addiction and epilepsy. In late September, the company announced positive results from the pivotal Phase 3 trial of its Firdapse drug for the treatment of a rare neuromuscular, autoimmune disorder, which boosted CPRX stock.
Biotech Stocks: Insmed (INSM)
Insmed (INSM) targets the development of lung disease treatments utilizing inhalation therapies. The company’s lead drug candidate is dubbed ARIKACE and attacks the lung infections, including those suffering from cystic fibrosis. The market opportunity is ripe for INSM stock since there are currency no inhalation-based antibiotics available.