Last week Kapitall reported on the tobacco industry's stellar annual returns, but Global Tobacco has more to brag about: It's one of only two global sectors to remain in positive territory in the last half-decade, along with pharmaceuticals.
SocGen reports the pharmaceuticals sector' year-to-date gains are 3.9%, an impressive feat that still falls short of Global Tobacco's year-to-date returns of 21.8%.
"Incidentally, the Global Tobacco is the strongest performing sector during the last five years in total returns terms and only second to Mining on a ten year view. It has achieved this with far less volatility and a greater proportion of the return being generated by the dividend stream."
Investing ideas
Tobacco and pharma have shown big gains over recent years, but will their winning streaks continue?
For ideas, we collected data on institutional money flows, and identified five tobacco and pharma stocks that have seen significant institutional buying during the current quarter.
Big money managers have extensive resources to analyze investing ideas. So if they're buying a certain stock, it's worth paying close attention.
Do you agree with this bullish sentiment? Use this list as a starting point for your own analysis.
List sorted alphabetically. (Click here to access free, interactive tools to analyze these ideas.)
1. Cubist Pharmaceuticals (Nasdaq: CBST): Operates as a biopharmaceutical company focused on the research, development, and commercialization of pharmaceutical products that address unmet medical needs in the acute care environment. Net institutional purchases in the current quarter at 2.7M shares, which represents about 4.4% of the company's float of 61.31M shares.
2. Dynavax Technologies (Nasdaq: DVAX): Dynavax Technologies Corporation, a clinical-stage biopharmaceutical company, discovers and develops novel products to prevent and treat infectious diseases. Net institutional purchases in the current quarter at 10.7M shares, which represents about 9.04% of the company's float of 118.32M shares.
3. Rigel Pharmaceuticals (Nasdaq: RIGL): Engages in the discovery and development of small-molecule drugs for the treatment of inflammatory/autoimmune diseases, as well as for certain cancers and metabolic diseases. Net institutional purchases in the current quarter at 3.2M shares, which represents about 5.61% of the company's float of 57.08M shares.
4. Simcere Pharmaceutical Group (NYSE: SCR): Develops, manufactures, and markets branded generic and proprietary pharmaceuticals in China. Net institutional purchases in the current quarter at 1.2M shares, which represents about 8.21% of the company's float of 14.62M shares.
5. Vector Group (NYSE: VGR): Engages in the manufacture and sale of cigarettes in the United States. Net institutional purchases in the current quarter at 2.4M shares, which represents about 4.96% of the company's float of 48.41M shares.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
List compiled by Eben Esterhuizen, CFA. Kapitall's Eben Esterhuizen and Rebecca Lipman do not own any of the shares mentioned above. Institutional data sourced from Fidelity.
