Buying biotechs may seem like jumping without a net these days, but these stocks pack plenty of snap back potential.
Yikes! A few weeks into February, and the indiscriminate sell-off in biotech just keeps getting more unnerving.
But here’s the good news. With virtually ever biotech getting dinged, there’s growing upside for investors able to discern the value from the junk in the sector. While a bigger drop could certainly be ahead, a lot of the downside risk is likely baked in for companies with big catalysts ahead.
But what about all the political posturing about drug pricing? Won’t that continue to weigh? Here’s what the market is missing: Proposals to cut drug pricing have been discussed for many years, and the chances of changes materializing in the coming years are slim. In addition, recent high-profile concerns have focused on the pricing for older pharmaceutical drugs — not the kind of breakthrough treatments many biotechs are pursuing.
Biotech stocks are not for the risk-averse, however, since they drop or pop on a whisper. But maintaining a small position in a few well-chosen biotechs also adds a lot more potential upside to a well diversified portfolio. With that in mind, three of our contributors pinpoint stocks that could help boost your portfolio through 2016 and beyond. Head on over to Motley Fool for all three…here’s my pick for Comeback Kid.
An intriquing play in biotechs right now is multiple sclerosis treatment powerhouse Biogen (NASDAQ:BIIB). Several big upcoming catalysts could send this biotech blue chip’s share price sharply upward in 2016 — assuming that all goes well.