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ETF Topper: Biotechnology Stocks Continue to Show Strength

Gilead Sciences (GILD) continued to ride high on news of its near $12 billion acquisition of Kite Pharma (KITE), lifting biotechnology peers with it.


So the VanEck Vectors Biotech ETF (BBH) and the iShares Nasdaq Biotechnology ETF (IBB), which rose more than 2% apiece, were among the best performing in exchange-traded fund land Wednesday. Fundstrat technical analyst Robert Sluymer noted yesterday that biotech stocks were emerging. He thinks long-term relative trends have turned positive and that Gilead, Biogen (BIIB), and Celgene (CELG) are “timely at current levels.”

Bank of America Merrill Lynch in a note published earlier this week indicated that they continue to stay overweight Health Care. Equity and quant strategist Savita Subramanian wrote:

We maintain our overweight in Health Care, which looks attractive to us from a fundamental, positioning and valuation perspective. Within the sector, we prefer large cap Biotech for attractive growth at a reasonable price. We maintain our marketweight in Technology given mixed valuation, most elevated positioning in our data history, but robust balance sheet and beneficiary of corporate tax reform — repatriation of cash overseas.

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