Biotech Bubble Bust: 2 Ways to Win

Are biotech stocks in a bubble? Is that bubble collapsing?

These are the two questions at the forefront of investors' minds. Given the tremendous run of biotech stocks, the iShares NASDAQ Biotechnology Index is up 80% over the last 2 years, it's easy to see why the bubble talk started. Mix in a tsunami of IPOs as new biotechs, some highly questionable, capitalize on easy money, and combine it with the relative ease of picking a multi-bagger stock -- it quickly adds up to irrational investor exuberance. 

Exuberance that can be fleeting. That same biotech index is down 15% in the last month, with some individual stocks getting hit considerably worse. However, whenever there is a sector wide sell-off, good stocks get indiscriminately dumped alongside the bad. This is when contrarian investors live the famous Warren Buffett saying of being "greedy when others are fearful," and find quality businesses with strong revenue and growth potential. 

On this edition of Market Checkup, Motley Fool health care analysts David Williamson and Michael Douglass discuss the fallout of the biotech collapse. They put on their best catcher's mitts and look to grab a few falling babies that have been thrown out with the biotech bathwater. Watch and find out at what two stocks they think are interesting at these new bargain prices.

6 stock picks poised for incredible growth
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Read/Post Comments (2) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 16, 2014, at 8:55 PM, classic216 wrote:

    Prosnesa's drug Drisapersen shouldn't be compared with Sarepta's drug Eteplirsen ---- two different compounds, two different dosing amounts, two different studies, two different results............maybe in the same category but I don't think it's fair at all to say Prosnesa's drug failure should cause concern for Sarepta's drug.

  • Report this Comment On April 17, 2014, at 8:01 AM, cmalek wrote:

    Is every time an industry or a sector has better temporary results than the rest of the market, going to be hailed as the next "bubble" by the pundits?! This is getting as bad as the media calling every scandal some kind of a "-gate"

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2916281, ~/Articles/ArticleHandler.aspx, 8/29/2015 11:05:08 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

David Williamson

The Motley Fool's Healthcare Analyst, I specialize in Pharma, Biotech, and how the ACA (Obamacare) is changing the business of healthcare in America. Follow me on Twitter for breaking stock news, policy thoughts, and misc musings...

Today's Market

updated 13 hours ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:00 PM
BIIB $303.69 Down -0.80 -0.26%
Biogen Idec CAPS Rating: ****
GILD $107.78 Down -0.21 -0.19%
Gilead Sciences CAPS Rating: *****
IBB $353.28 Up +2.37 +0.68%
iShares NASDAQ Bio… CAPS Rating: ***