The Seesaw Battle Continues in the Biotech Sector
(Continued from Prior Part)
IBB large-caps turned positive for December
The large-cap stocks of the iShares Nasdaq Biotechnology ETF (IBB) turned positive for the month of December 2015 after rising 0.7% for the day. Out of 15 large-cap stocks that IBB has in its portfolio, 11 stocks gave positive returns, and four stocks ended up in the red.
IBB’s large-caps underperformed the SPDR S&P 500 ETF (SPY), which returned 0.8% and outperformed the IBB itself with returns of 0.2% as of December 21, 2015. IBB’s large-caps account for ~69.3% of IBB’s portfolio. The large-caps include Shire (SHPG), Mylan (MYL), and Incyte (INCY), with returns of -0.8%, 0.9%, and -0.3%, respectively.
The above graph reflects the daily returns of IBB large-caps, IBB, and the SPDR S&P 500 ETF (SPY). From the start of December 2015 to date, IBB large-caps have given a return of 0.2% and managed to outperform IBB’s return of -0.35% and SPY’s return of -3.3% for the same period.
Vertex drives IBB’s large-caps after losing for two days
Vertex Pharmaceuticals (VRTX) was the top performer among IBB’s large-cap stocks, rising 3.5% on December 21. It closed at $120.56 and was trading 2.6% lower than the 100-day moving average of $123.89 and 3.1% lower than the 20-day moving average of $124.48.
VRTX witnessed a trading volume of ~1.2 million shares compared to the five-day average trading volume of ~2.5 million shares per day. The RSI (Relative Strength index) of VRTX was 40, indicating that the stock is slightly tilted toward the oversold territory. With a book value of $3.75 per share, the stock is trading at a price-to-book value (or PBV) of 32.12x. VRTX has a weight of ~4.2% in IBB’s portfolio.
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