What Should Biotech Investors Do Now?
Benzinga recently had the chance to talk with Jason Napodano, biopharma analyst and consultant, and owner of BioNap Consulting. Below is a look at some highlights from the expert.
Macro Conditions And The Biotech Industry
When asked about the current state of macro conditions for the biotech industry, the expert noted that biotech is highly influenced by market sentiment due to the stocks’ high beta.
While the Chinese economy has little, and often no fundamental impact on specific companies, negative market sentiment affects the industry as a whole.
A Patient Approach To Investing
In a recent SeekingAlpha article, Napodano characterized himself as a “very patient investor in biotech companies.”
The expert said he looks for companies “with positive changing fundamentals” and makes sure they “have the right management in place to create value.”
He assured that he is also keenly focused on cash and capital structure, because when he’s wrong “it is often because of bafflingly bad management decisions or horrible capital structure.”
Biotechs And Bears
That being said, he added, “I'm using this bio-bear market as an opportunity to add-to and build a position in some solid names. I'm hoping this basket approach will reduce risk and end up rewarding me over the next 12-18 months.”
When questioned about this approach, the expert explained that, while the selloff is temporary, he couldn’t say when the bottom will hit. However, he does know that if this is truly a bear market, many biotechs will probably lose money.
He also shared that he is looking to increase his exposure to Cynapsus Therapeutics Inc (NASDAQ: CYNA), Corbus Pharmaceuticals Holdings Inc (NASDAQ: CRBP), Pieris Pharmaceuticals Inc (NASDAQ: PIRS), Neurocrine Biosciences, Inc. (NASDAQ: NBIX) and POZEN Inc. (NASDAQ: POZN).
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