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biotech Archives

What are Biotech Stocks?

Biology plus technology equals biotech. But what does that mean in reality? And is this a good sector to invest in or is it better to avoid it?

Biotechnology uses living things to create and develop healthcare treatments, and includes such new and diverse sciences as genetics, immunology, and the development of pharmaceutical therapies and diagnostic tests. Biotech stocks are, therefore, stocks in companies primarily, though not always, in the healthcare industry.

However, biotech stocks can be a finicky area for investing. The metrics for valuation are entirely different, as you can’t necessarily define the success of these companies by earnings. Thus, biotech analysts need to have a deep understanding of drug development and the many different drug candidates in order to put a specific company’s growth prospects into perspective.

That said, buying biotech stocks is as good an idea as any—just so long as you pick the right stocks! Always take things on a stock-by-stock basis. Like stocks in other sectors, the drivers of value remain the same, in that a positive clinical trial or a lucrative partnership can add value to a biotech stock.

Similarly, excellent management is the key to biotech investing as the nature of drug development includes a high failure rate. Thus at the end of the day, you want a CEO and management team that can take the drug failures and still keep creating value for their shareholders.

Just beware of biotech and pharmaceutical companies that increase revenue through raising prices. In short, that’s bad publicity. Investors will find plenty to like in stocks of companies that are generating revenue growth by selling more drugs, not just charging more for them. Companies with robust pipelines of new drug candidates will also be more resistant to pricing pressure.

And yes, biotech ETFs make it easy to ride a trend and put bets on a group of stocks rather than just one. And the standard wisdom is that spreading your investment around on a group is a lower-risk proposition than buying single stocks. But making a lower-risk investment can also lull you into a false sense of security.

To learn more and start expanding your investing options, download our FREE report, 3 Small-Cap Stocks That Can Work Now Despite COVID-19, right now.

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Cabot Small-Cap Confidential Special Bulletin

January 15, 2021|From Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

Late yesterday Accolade (ACCD) announced it was diving deeper into the telehealth market by acquiring 2nd.MD, a small start-up based in Houston, TX. The acquisition target provides expert medical consultation services to patients, typically at a critical point in the patients’ lives when a second and/or...
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Cabot Turnaround Letter Weekly Update

January 15, 2021|From Cabot Turnaround Letter|by Bruce Kaser|Value Investing

This week we had two companies reporting earnings, one reports next week, and the earnings deluge starts the following week with at least seven companies reporting.
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Cabot Prime Week Ending January 15, 2021

From the Cabot Prime Week Ending January 15, 2021 issue of Cabot Prime|by Cabot Wealth Network|Cabot Prime

Stock Recommendation Tracker The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More

Cabot Prime Pro Week Ending January 15, 2021

From the Cabot Prime Pro Week Ending January 15, 2021 issue of Cabot Prime Pro|by Cabot Wealth Network|Cabot Prime Pro

Stock Recommendation Tracker The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More

Cabot Early Opportunities Special Bulletin

January 15, 2021|From Cabot Early Opportunities|by Tyler Laundon|Small Cap Stocks

What a market! Despite all the noise out there our portfolio’s performance continues to exceed expectations. Our average gain across 30 positions is hovering between 80% and 85% as I write.
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Cabot Growth Investor 1463

From the Cabot Growth Investor 1463 issue of Cabot Growth Investor|by Mike Cintolo|Growth Stocks

Taking Things on a Stock-by-Stock Basis We believe one of the main reasons our system has proved durable is that it doesn’t focus on just one or two factors, but incorporates things from different angles. For instance, when selecting stocks, we’re not only looking charts...
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Cabot Small-Cap Confidential Weekly Update

January 14, 2021|From Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

As we near the end of the second week of 2021 and approach inauguration day, the market is barreling full steam ahead, seemingly unaware of the dung piles that are consistently thrown in its path.
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Cabot Global Stocks Explorer Bi-weekly Update

January 14, 2021|From Cabot Global Stocks Explorer|by Carl Delfeld|Emerging Markets

The phrase you hear more than ever from market prognosticators these days is that they are “cautiously optimistic” about the state of the stock market. In some ways this is pretty useless advice, but in another it hits the nail on the head. market...
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Cabot Income Advisor Weekly Update

January 13, 2021|From Cabot Income Advisor|by Tom Hutchinson|Income Investing

In this issue I highlight two timely stocks for purchase now.
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Cabot Undervalued Stocks Advisor Weekly Update

January 13, 2021|From Cabot Undervalued Stocks Advisor|by Bruce Kaser|Value Investing

Most stocks on the Cabot Undervalued Stocks Advisor recommended list had strong performance this past week. Part of the strength was perhaps due to money managers’ general optimism that seems to brighten with turn of the calendar. With last year’s bonuses firmly in bag,...
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Cabot Dividend Investor 121

From the Cabot Dividend Investor 121 issue of Cabot Dividend Investor|by Tom Hutchinson|Dividend Stocks

A Goliath of the Dawning Digital Age Are you sick of hearing about the virus and the election? I know I am. But there’s good news. As hard as it may be to believe, these current obsessions will fade away, and soon. As the from...
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Cabot Micro-Cap Insider 121

From the Cabot Micro-Cap Insider 121 issue of Cabot Micro-Cap Insider|by Rich Howe|Small Cap Stocks

How I Pick Micro-Caps It’s been a while since I’ve explained my process for picking micro-cap stocks so I figured it would be worthwhile to review. It can be extremely profitable to invest in growth companies, as any Tesla or Amazon shareholder will tell you. But is...
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Cabot Small-Cap Confidential Special Bulletin

January 12, 2021|From Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

Karyopharm (KPTI) pre-announced Q4 2020 results yesterday morning and I watched the stock, which was weak (closed down 8%) throughout the day as I pondered the results. I’ll get to my thoughts in a minute. First, the numbers.
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Cabot Profit Booster 157

From the Cabot Profit Booster 157 issue of Cabot Profit Booster|by Jacob Mintz|Options Trading

This week, Cabot Profit Booster features a top new-economy recommendation in the fast-growing social media space whose stock is just short of its all-time high.
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Cabot Stock of the Week 330

From the Cabot Stock of the Week 330 issue of Cabot Stock of the Week|by Timothy Lutts|Stock Market

The first week of the year saw buyers dominate, pushing the major indexes to higher heights on most days. Thus the major uptrend is intact, but extended, which means this is probably not the best time to buy an aggressive growth stock.
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Cabot Turnaround Letter Weekly Update

January 8, 2021|From Cabot Turnaround Letter|by Bruce Kaser|Value Investing

This week we had one company reporting earnings - Lamb Weston Holdings (LW). We are raising our price target on Signet Jewelers (SIG) to 42 from 35. DuPont (DD) shares are under review as they trade above our 75 price target.
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Cabot Prime Pro Week Ending January 8, 2021

From the Cabot Prime Pro Week Ending January 8, 2021 issue of Cabot Prime Pro|by Cabot Wealth Network|Cabot Prime Pro

Stock Recommendation Tracker The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More

Cabot Prime Week Ending January 8, 2021

From the Cabot Prime Week Ending January 8, 2021 issue of Cabot Prime|by Cabot Wealth Network|Cabot Prime

Stock Recommendation Tracker The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More

Cabot Small-Cap Confidential Special Bulletin

January 8, 2021|From Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

Yesterday after the close Accolade (ACCD) reported Q3 results that surpassed expectations on both the top and bottom lines.
Read More

Cabot Growth Investor Bi-weekly Update

January 7, 2021|From Cabot Growth Investor|by Mike Cintolo|Growth Stocks

The indexes are having another good day today, led by growth stocks this time—as of 3:30pm, the Dow is up 253 points and the Nasdaq is up a big 322 points.
Read More

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