We know commodities have been hit hard over the past month.
Here’s the current score:
Gold: $1423/ounce
Silver: $23.43/ounce
Copper: $3.12/ounce
Oil: $88.47/barrel
Uranium: $40.75/pound
Housing is mixed: Housing sales were down 0.6% in March; housing prices were up 11% yoy to a median $184,300.
Losers Are Winners
Back on February 26, I gave you three stocks to short in my article entitled “Three Stocks To Sell Now.”
They included Amazon (NASDAQ: AMZN), Netflix (NASDAQ: NFLX), and Palo Alto Networks (NYSE: PANW).
All three stocks are down about 20% apiece.
Today I’d like to focus on stocks are going up.
Check out the iShares Biotechnology Index Fund (NASD: IBB)…
The biotech sector has been hot all year.
It seems that every day a biotech company is among the day’s biggest gainers.
Yesterday, for example, saw shares of ARCA Biopharma Inc. (NASDAQ: ABIO) jump 48% to $2.93.
The company announced it would collaborate with Medtronic (NASDAQ: MDT) on its lead developmental drug Gencaro, a drug that prevents atrial fibrillation.
Of course, ARCA is a tiny company with a $9.42 million market cap and zero earnings. This deal simply validates its existence for the time being.
But hey, making money is good.
It’s no wonder then that Forbes is reporting there has been an inflow of $57.8 million into the IBB ETF. That’s a 2.2% increase over last week.
Now, I’m not a buyer here at the top of the range, but you should put IBB on your radar…
We are in an age of retiring baby boomers and medical wonders.
The best thing about biotech is that it doesn’t matter if the global economic system is going to pot; IBB can go up regardless.
That said, biotech stocks are notoriously volatile. They can drop as fast as they rise. All it takes is a lawsuit or a missed FDA trial and the selling is fast and heavy.
Owning the ETF is one way to safely diversify.
Oh, BABY
One stock you might consider in this sector is Natus Medical (NASDAQ: BABY) of San Carlos, California.
The company provides neurodiagnostic and newborn care products worldwide. These products screen and detect common medical ailments in newborn care, hearing impairment, neurological dysfunction, epilepsy, sleep disorders, and balance and mobility disorders.
The company is small and growing fast. They have a market value of $383 million with a forward P/E of 14 and a PEG rate of 0.71.
The PEG ratio, or Price over Earnings Growth, was popularized by Peter Lynch, who wrote in his 1989 book, One Up on Wall Street: “The P/E ratio of any company that’s fairly priced will equal its growth rate.”
In other words, a fairly-valued company will have its PEG equal to 1. Therefore, you want to look for companies that have a PEG under 1.
Revenue growth for Natus was 41.50% year over year.
Another company with a low PEG ratio is PDL BioPharma (NASDAQ: PDLI).
PDL is involved in the humanization of monoclonal antibodies and targeted treatments for cancer.
The company has a PEG ratio of 0.33, grew earnings at 26.90% last year, and pays a fat 7.90% dividend, though it should be noted that its patents will run out in 2016.
If you are interested in investing like Peter Lynch, or you just like low-PEG/high-yielding stocks… you should check out The Wealth Advisory investment newsletter.
It will be the best money you ever spent.
Until next time,
Christian DeHaemer
Check us out on YouTube!Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor’s page.
