On Thursday the biotech stock Intercept Pharmaceuticals (ICPT) went up 281% after drug trials proved successful, it went up another 61% on Friday, and is up 500% for the week. The company has never had a profit. The market capitalization of ICPT is 8.62b, last year it had 2m in sales, and the price to sales ratio is 3289.26. Some other companies price to sales ratios are: DIS 2.92, HRB 2.81, UTX 1.67, BA 1.25. Obviously this is a bubble in biotechnology stocks. My only suggestion is you make sure you get out quickly when the bubble bursts. SBiotechnolgy was up 2% on Tuesday, 2% on Wednesday, 5% on Thursday, and 4% on Friday.
IBD TBP’s Current Outlook is “Confirmed Uptrend” – time to invest. Obviously anything related to biotechnology had a strong weekly uptrend, but my highest rated fund whose deviation from a 39 week smoothed moving average has increased for two weeks is SAirTransportation.
My current investments:
SAutomotive has a price of $56.33, a sell price $53.51, a relative rank of 45, and will be sold when I need to exchange it for another fund or it passes the sell price.
Nordic has a price of 44.97, a sell price 42.72, a relative rank of 06, and is a hold.
SSoftware&ComputerServices has a price of 119.08, a sell price 113.13, a relative rank of 04, and is a hold.
SAirTransportation has a price of 61.78, a sell price TBD, a relative rank of 03, and is a buy.
My portfolio changes this weekend:
IRA #1 – None
IRA #2 – Invest 20% in SAirTransportation.
My portfolio market exposure after this weekend’s changes
IRA #1 – 100% invested
IRA #2 – 80% invested