Biotech Stocks: Big Buying Opportunities in 2020’s Sector of the Year

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Back in November — which seems like an eternity ago — I wrote that 2020 would be the Year of Biotech. Neither I nor anyone else knew how critical medical sciences and healthcare would become just a few months later amid a worldwide pandemic.

I still see 2020 as the Year of Biotech.

These stocks have shown relative strength in the bear market, and the current crisis gives us a glimpse of the innovative breakthroughs coming our way … including efforts to fight the coronavirus.

In a volatile stock market like this, you can buy most stocks at a massive discount. Big names are down 20% … 30%… even 50%. Some small-cap stocks have slid even more.

This rare situation has opened up an unusual buying opportunity that we haven’t seen for at least the past decade … or longer.

Fundamentally, the investment mega-trends I’m following — including in my new Crisis and Opportunity Portfolio — are still on track. The coronavirus has scrambled everyone’s plans for the moment, but it won’t last. The market has recovered from every past bear market, and we’re seeing glimmers of hope in the number of new cases around the world.

I’ve been saying for more than week now that it’s time to start investing in stocks again. Believe me, trying to pick an exact bottom isn’t worth the risk. Instead, you have to focus on the trends that will spawn the market’s next big winners.

Biotechnology is one of these unstoppable mega-trends.

In 2019, before the coronavirus was on anyone’s mind, investors poured $13.9 billion into biotech startups. That was $4 billion less than 2018’s record-breaking number but still higher than any other year on record.

The industry was climbing to new heights as companies began using next-generation technologies like artificial intelligence (AI) to find new drugs for diseases like cancer quicker and cheaper than ever before.

Another cutting-edge technology that’s been on the rise is genomics, which will usher in a new era of personalized medicine for each patient as well as speed up the creation of new drugs.

And at this particular moment, it makes sense that investors would take notice as biotechs around the world are on high alert to find better drugs and/or a vaccine to tame the coronavirus.

Indeed, the sector has held steady through the recent volatility. It’s one of the broader market’s top performers.

So far this year, the S&P 500 is down more than 17% while the VanEck Vectors Biotech ETF (NASDAQ:BBH) is down closer to 5.6%.  That’s far better than some of the other sectors that you might think would be strong right now — like household products and food and staples retailing, which are both down 15%, according to Fidelity.

Yes, many biotech stocks are down at the moment. But that sets up an incredible chance to get some of the best at a discount.

A Global Effort

Right now, more than 140 experimental coronavirus treatments and vaccines are in the works worldwide, according to the Wall Street Journal. Researchers are moving at record pace, setting up 254 clinical trials to test drugs and/or vaccines in a matter of weeks or days.

Whether a given company is a part of this effort or not, nearly every biotech has been impacted by the pandemic. For instance, clinical trials are getting pushed back while healthcare facilities around the globe have shut down for fear of spreading the virus.

But the delay is short term. And longtime MoneyWire readers know that we focus on the long-term big picture.

Artificial intelligence and genomics already play a key role in the biotech industry as companies try to find a workable solution for what’s ailing all of us.

And unlike the recent focus on producing protective equipment and coronavirus tests that will likely fizzle after the worst has passed, the use of these technologies will only continue to grow.

My #1 stock in the Crisis and Opportunity Portfolio that I just released last week is a great example. The company uses AI in its predictive analytics to improve patient care and lower costs for insurance companies. Part of that involves the exploding trend of telehealth.

Telehealth includes the virtual doctor’s visits that are keeping us all out of waiting rooms during the pandemic. But I suspect doctors and patients alike will stick with the convenience and efficiency of the service long after the current crisis passes.

This stock lost a lot of ground in the sell-off, but it is already up 33% since I recommended it last Wednesday. The company is forecast to deliver 61% annual revenue growth and has a clear path to profitability, which is important when investing in smaller companies. I see a lot more upside to come.

Finding the best small companies in the best industries like biotech that will see the biggest gains as we recover is what my new Crisis and Opportunity Portfolio is all about.

I’ve handpicked the companies best positioned to soar, and we’re adding them strategically one by one. That’s the smartest way to buy in this still-volatile market.

The current selling is setting up amazing buying opportunities in investment trends that won’t slow due to the pandemic. The key is knowing which ones represent the best potential over the long term.

Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/moneywire/2020/04/biotech-stocks-big-buying-opportunities-in-2020s-sector-of-the-year/.

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