Biotechnology stocks surged higher on Monday after Nasdaq-100 component Gilead Sciences, Inc. at a hefty premium to last Friday’s closing price. Sector funds broke out above long-term resistance in June and could now gather additional momentum, potentially lifting components at all capitalization levels to 2017 and multi-year highs.
Junior biotech stocks are well positioned to benefit from this bullish development and could outperform well-established manufacturers with deeper pipelines. Many issues at low capitalization levels are still trading well below 2014 and 2015 highs, offering plenty of running room for rallies into year end. Even so, careful stock picking is required because high cash burn and weak or non-existent revenues raise the odds for secondary offerings or hedge fund sweetheart deals that can dilute shares and wipe out carefully accumulated profits. (See also: A Primer on the Biotech Sector.)
A Monday biotech merger triggered a sector-wide advance that could lift junior biotech stocks to multi-year highs. …read more
Read more here: 3 Junior Biotechs With Solid Upside Potential
Category: PIRS, CBAY, ABEO, GILD, KITE