Is The Biotech Stock Correction A Buying Opportunity Or A Wake Up Call?

Disclosure: I own shares of AMGN and GILD

Biotechnology stocks have been in a sharp correction this week. The iShares Nasdaq Biotechnology ETF dropped close to one-percent in early Thursday trade, following a 1.89% decline on Wednesday; and the SPDR S&P biotech ETF registered similar losses.

Is the correction a buying opportunity or a wake up call?

Both.

On the one side, the correction is a buying opportunity for biotech companies with sound fundamentals. That is, companies which have a broad portfolio of products that have pasted both the lab test and the market test, and delivered the milk, ie profits on Wall Street.

Gilead Sciences is one of these companies, which has close to $25 billions in revenues and trades at a forward PE of less than 10. Amgen and Regeneron Pharmaceuticals have solid revenues, though they trade at higherbut reasonable for a fast growing sectorPEs.

Thats how biotechnologyinvestinghas turned into a hot theme in the mass and social media.

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Excerpt from:
Is The Biotech Stock Correction A Buying Opportunity Or A Wake Up Call?