The SPDR S&P Biotech ETF is down close to 25% year-to-date but Michael Yee sees several names in this space that look promising at current valuations.
Why did XBI recover in recent weeks?
Interestingly, XBI is down by that much despite a 10% rebound over the past two weeks. Explaining the price action on CNBC’s “The Exchange”, the Jefferies analyst said:
There’s a lot of short-term traders believing that we can get a bounce here because it’s so oversold. A lot of people think M&A is still on the cards. So, I think there’s a lot of hope in the oversold conditions here.
Last week, Boston Private’s Shannon Saccocia said the biotech giant, AbbVie, up 20% for the year already was a great stock to play the healthcare space.
Yee’s favourite stocks in the biotech space
Two names, in particular, that pop out to Yee in biotech are Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) and Fate Therapeutics Inc (NASDAQ: FATE). He added:
We’ve added Vertex to our franchise top picks. Stock’s up 16% year-to-date; we still think it can move higher. Names like Fate that’s had about 60% pullback; that stock can move up with a rally in XBI.
Yee is also bullish on Zai Lab Ltd – a Chinese biotech company that’s down 30% for the year.
The post Biotech is ‘oversold’: top stocks to capitalize on the pullback appeared first on Invezz.
Source: https://invezz.com/news/2022/03/29/biotech-is-oversold-top-stocks-to-capitalize-on-the-pullback/