Ishares Nasdaq Biotechnology (IBB)

The month of May is probably one of the strongest months of the year for biotechs. The industry gains about 70% of the time for the month of May. Everything NASDAQ related tends to do well from about mid April all the way through to about mid July. The more predominant period of seasonal strength, which he tends to play, is from about mid June all the way through to September.

One of his core themes for the last couple of years has been biotech. There are all kinds of new products coming down the pipe, with companies that are not terribly expensive. This is a way to get broad exposure to the sector without taking the binary risk that comes in some of the earlier stage companies.

When you look at the largest companies in this, it is Amgen, Gilead Sciences, etc. He recently shorted this in his hedge fund as he thought it was a little stretched on valuations. If you want to play big biotech and growth biotech this is a good one.

Chart shows the trend is upward. Outperforming the market and above its 20 day moving average. Everything looks great on a technical basis. Seasonally, this usually does very well from around the latter part of June right through until September. A lot of this positive movement has to do with a series of healthcare conferences, which are held where biotech companies announce new results and new research.

.4% expense ratio. He likes it. 122 holdings.

42 times earnings so it is rich, but Biotech stocks always are. The price is way above the 200 day moving average. Likes the ETF, but it is expensive.

An example of a sector that has been considered to be expensive for the better part of 3-4 years. Not sure of their specific holdings but would imagine they have Biogenic, Biodex, Celgene, etc. This is an example of something he continues to own but doesn’t pretend to know enough about some of their individual companies. A perfect example of companies that you would want to own inside an ETF structure. Thinks it continues to go higher.

Biotech ETF. You have to go with the IBB-N because we don’t have a Canadian one.