Why Biogen Idec Inc., Vertex Pharmaceuticals Incorporated, and Broadcom Corp. Are Today’s 3 Worst Stocks

Health-care and high-growth names continue to stumble as a sell-off continues in the stock market today.

Apr 11, 2014 at 7:51PM

The sell-off in high-growth companies -- especially in tech and biotech names -- continued to snowball on Friday. What began last month with a single letter from three congressmen questioning the pricing of Gilead Sciences' Sovaldi has turned into a legitimate sell-off. Biogen Idec (NASDAQ:BIIB), Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), and Broadcom Corp. (NASDAQ:BRCM) each ended in the dredges of the stock market today. The S&P 500 Index (SNPINDEX:^GSPC) lost 17 points, or 1%, to end at 1,815. 

Biogen Idec, a biotechnology company that offers treatments for ailments from hemophilia to MS, lost 4.7% today. The stock ended as the worst performer in the entire S&P 500 Index, as indiscriminate selling among peers in the industry hit shares where it hurts. The biotechnology industry was down an astounding 7.7% in all today, so many of Biogen's smaller peers posted even steeper losses on Friday. Investors will get a better glimpse on April 23 of whether the recent slump in share prices was warranted or not, when Biogen reports its quarterly earnings.


Source: Vertex Pharmaceuticals website

Shares of Vertex Pharmaceuticals also lagged the market, plunging 4% in trading today. Vertex's business is essentially reliant upon two drugs: Kalydeco, which treats cystic fibrosis, and Incivek, which treats hepatitis C. Kalydeco is seen as the growth engine of the future, as Incivek's sales have wound down from a blistering pace of $450 million a quarter in 2011 to $86 million a quarter and declining in recent periods. Consider the fact that the biotech space is in a freefall right now, and it's no wonder Vertex shares are reeling. 

Lastly, Broadcom Corp. finished as a major underperformer, losing 3.3% in trade. The company is already going through an adjustment period, as the cooling of the smartphone market has kept the share price of the chipmaker in check. With a P/E of 40, the dreaded label of being a technology company in a sector-specific sell-off, and recent downgrades by research outfits, Broadcom doesn't seem to have much going for it. Personally, while I do think the recent marketwide pullback is a healthy reality check, I don't think Wall Street's giving Broadcom a fair shake, and pessimism surrounding the company provides a good entry point for long-term investors.

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John Divine has no position in any stocks mentioned. You can follow him on Twitter @divinebizkid and on Motley Fool CAPS @TMFDivine.

The Motley Fool recommends Gilead Sciences and Vertex Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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