Are Biotechs a Contrarian Bet?

Monday, February 13, 2017

At the beginning of December 2016, new US President-elect Donald Trump surprised a lot of investors by announcing he was willing to bring down drug prices while most investment analysts were expecting less regulation of this industry. Since this announcement, the US healthcare sector has underperformed the S&P 500.
This situation presents an ideal opportunity to buy cheap biotech shares. Two significant reasons can be advanced to support this point of view:
1/ The Trump’s Administration is likely to focus first on general economic measures ahead of measures aimed at a single industry. This is why Trump’s main priority is likely not only to spur the return of foreign cash that should lead to resurgence in mergers and acquisitions but also to cut taxes which may trigger stock buy-backs and dividends... Read the full article here