I’ve been talking a lot recently about where I see opportunity after the election and looking ahead to a Donald Trump administration. Today, I want to talk about the potential within the biotechnology space — specifically as it concerns Gilead Sciences, Inc. (NASDAQ:GILD), Biogen Inc (NASDAQ:BIIB) and Intercept Pharmaceuticals Inc (NASDAQ:ICPT)
Not surprisingly, there are both winners and losers from a Trump presidency. For example, the financials and infrastructure stocks soared in the immediate aftermath of the election, while “green energy” has been a clear laggard.
Biotech and healthcare outperformed once it was announced that Trump had taken the cake, and stocks bounced in relief after being the targets of mean tweets from Hillary Clinton and Bernie Sanders.
Still, I am not interested in chasing drug names, as most of the large pharmaceutical companies have thin product pipelines and aging blockbusters. But while Clinton and Sanders won’t have their way in putting onerous rules in place regarding price hikes, Trump is no fan of 1000% mark-ups either.
There are select stocks worth looking at, though, including in the biotechnology sector. Several biotech stocks have robust pipelines, and biotech drugs in general are harder to knock off than pharmaceuticals.
Biotech Winners and Losers
GILD: I was recently asked on Twitter whether there was potential in Gilead Sciences. Honestly, I’m not in GILD at the moment, and there are several companies I like more right now. I have seen it mentioned in the rumor mill that there could be a takeover bid, but it would take more for me to buy it here.
If you’re looking for opportunities in biotech, I like a couple of stocks more because of their fundamentals: Biogen and Intercept Pharmaceuticals.
BIIB: Biogen is one of the pioneers in biotechnology. It works to develop and commercialize innovative therapies for illnesses with few, if any, treatment options. The company has the world’s most extensive portfolio of multiple sclerosis (MS) therapies and is also known for its innovative treatments for hemophilia patients.
I talked about the investment potential in this stock in an article back in August, and after pulling back through the fall, BIIB is now back to around the same levels where I saw potential before. The good news is that I continue to see upside.
ICPT: Intercept Pharmaceuticals’ focus is on treating progressive non-viral liver diseases. The company reported a decent third quarter earlier this month, beating on the bottom line but falling short on revenue. ICPT shares trade 40% below their 52-week high, and I view them as a good value.
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