Daily Gains Letter

Stock Market’s Vulnerable, but These Stocks Just Don’t Care

By for Daily Gains Letter |


Right now, there is still some incredibly positive action in this stock market.

Following the major stock market indices is useful, but some of the best stocks out there are significantly outperforming these indices.

Leadership at the speculative end of the stock market is pronounced in biotechnology stocks. These have been some of the best stocks going for the last couple of years, and they are still extremely powerful wealth creators.

One of the best stocks that just broke out of a major stock market consolidation is Celgene Corporation (NASDAQ/CELG). This stock is up almost 50%—since the beginning of the year! Now that’s what I call a powerful breakout. Celgene’s stock chart is featured below:

Chart courtesy of www.StockCharts.com

Celgene develops cancer treatments, and the company has been growing at an incredibly fast pace for such a large-cap enterprise. It’s also a stock market favorite among institutional investors, and recent buying in the shares could mean continued momentum.

I have to say, however, that one of the best stocks in the entire biotechnology sector has been Biogen Idec Inc. (NASDAQ/BIIB). Biogen has not only been one of the best stocks in the biotechnology sector, but it has also been one of the best stocks in the entire stock market since 2010.

This company has developed a number of therapies, but it’s been very successful in helping people who suffer from multiple sclerosis (MS). MS is a disease with very few meaningful treatments, so Biogen has an edge. Biogen’s stock chart is below:

Chart courtesy of www.StockCharts.com

Some of the best stocks that the market has to offer are companies that you don’t hear about in mainstream financial commentary.

Even when the broader stock market is going down or investor sentiment turns negative, there are still plenty of stocks that are going up, trading against the prevailing tide.

As a sector, biotechnology stocks can be particularly attractive, because they have very little correlation to the broader stock market action.

But being some of the best stocks the market has to offer also comes with greater risk. Biotechnology stocks should absolutely be considered 100% speculative securities. Nobody can predict whether a company will get a drug approved or when a new discovery might happen.

But if you pay attention to this sector and you follow the winners—those companies that have a number of successful drugs and great potential in the pipeline—you can quickly find momentum and some of the best stocks a speculative investor can trade.

The stock market now offers all eventualities. But regardless of where it goes, there is still a lot of strength in price out there. And that’s because institutional investors have to put their cash to work.

The stock market is always vulnerable, but that is the point; that’s what equity securities are—risk capital.

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