Large Cap Biopharma Winners And Losers 2015-16: Which Stocks Can Beat The ETFs?… Part 2

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Rayno Large Cap Biopharmaceuticals…Part 2…A Stock pickers Market

Time to Rebuild Your Portfolio: ABBV, BMY, GILD

Below we have summarized selective metrics for large cap biopharmaceutical companies. We began the process of revising and rebalancing our portfolio after the J.P.Morgan Healthcare Conference. Here are some parameters to watch that should help in stock picking:

Stock performance has been disappointing with all large cap stocks down year to date and over a 12 month period. Look for a technicals to show a bottoming process like the IBB at the $250 level.

We favor large caps over small caps now that valuations and growth potential are being questioned. Many favorite small caps are down by more than 50% over 6 months.Track XBI for small cap performance.

Valuations were clearly out of line with 2015 EPS and Revenue growth. Stocks are now undergoing a reset depending on 2016 growth potential. Momentum and perceived hyper-growth stocks have fallen the most from 52 week highs.

Stock selection will be important for 2016 outperformance. ETFs and mutual funds are likely to underperform until the bull market returns. The bear market began in September 2015.

Recently we added three stocks to buy now based upon valuation, growth potential and emerging therapeutic platforms; Abbvie (ABBV), bluebird bio, Inc. (BLUE) and Gilead Sciences (GILD). This is a new portfolio which replaces our original portfolio that had exceptional returns from 2/2/09 through 12/31/15. Six of our previous stock picks were acquired.Today we will add another new portfolio buy, Bristol-Myers Squibb Co.(BMY) at a price range of $59-62. Bristol Myers is a leader in the emerging field of immuno-oncology with a potential blockbuster cancer therapeutic product in Opdivo (nivolumab) which blocks a key receptor on T cells thereby boosting a patient’s immune system. The Company has a large pipeline of small molecule and biologic products in oncology, virology and fibrotic/cardiovascular diseases being developed over four drug platforms. Revenue is expected to grow 6.3% in 2016 and 11.9% in 2017 led by Opdivo and Yervoy for multiple oncology treatments. EPS guidance for 2016 is in the $2.30-2.40 range. Dividend yield is 2.52%.