{"id":18410,"date":"2021-05-07T07:30:34","date_gmt":"2021-05-07T11:30:34","guid":{"rendered":""},"modified":"2021-05-07T07:30:34","modified_gmt":"2021-05-07T11:30:34","slug":"these-high-flying-growth-stocks-are-now-value-trades","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/these-high-flying-growth-stocks-are-now-value-trades\/","title":{"rendered":"These High-Flying Growth Stocks Are Now Value Trades"},"content":{"rendered":"

The biotech sector is one of the only “value” plays in the market right now.<\/p>\n

It’s crazy, I know. Biotech stocks are super volatile. They’re normally seen as high risk\/high reward. It’s certainly not a sector that most folks should consider buying with their “safe” money.<\/p>\n

But hey, it’s 2021. This is the year of crazy…<\/p>\n

Investors have been throwing money into Special Purpose Acquisition Companies (SPAC), Non-Fungible Tokens (NFT), cryptocurrencies with no function, low-quality bonds that offer little return, and regular stocks that are trading at historically ridiculous valuations. <\/p>\n

And, for some reason, they’ve been selling off the biotech stocks.<\/p>\n

The S&P 500 is up about 11% so far in 2021. The S&P Biotech ETF (XBI) is down 11%. This lagging performance has pushed the biotech sector down to the lowest value – relative to the S&P 500 – we’ve seen in over a year.<\/p>\n

Take a look at this ratio chart comparing XBI to the S&P 500…<\/p>\n

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(Click here to expand image)<\/a><\/p>\n

When this chart is moving higher, biotech stocks are outperforming the broad stock market. When the chart is falling – XBI is lagging the market.<\/p>\n

The biotech sector peaked in early February. And, it’s basically been a straight shot lower since then.<\/p>\n

We’re at the point now, though, that the high-flying biotech stocks are looking like value stocks.<\/p>\n\n\n\n
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Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Consider United Therapeutics (UTHR), for example. UTHR is a $9 billion company. It’s a top-five holding in XBI. And, after pulling back about 10% over the past month, UTHR trades for about 14 times this year’s earnings estimates.<\/p>\n

That’s quite a bargain compared to the 23 times forward earnings investors are willing to pay for the S&P 500.<\/p>\n

Now, I’m not suggesting that folks just blindly throw money into the biotech sector because it’s cheap relative to the broad stock market. But, I am saying that if you’re looking for value in a market environment that’s squeezed just about every drop of value out of it, then maybe you have to look outside of the ordinary.<\/p>\n

After all, we found value in the gold sector about a month ago<\/a>. That seems to be working out pretty well so far.<\/p>\n

So, maybe it’s time to start looking for value in the biotech sector.<\/p>\n

Best regards and good trading,<\/p>\n

<\/p>\n

Jeff Clark<\/p>\n

P.S.<\/strong> For the last few months, my colleague Eoin Treacy has been writing the Saturday Market Minute<\/em>. And, he’s shared plenty of great ideas on copper<\/a>, bitcoin<\/a>, and even alternative energy sources<\/a>.<\/p>\n

But recently, Eoin shared one of his market analysis videos with me. He regularly films and shares these videos with institutional-grade investors.<\/p>\n

I asked if he’d be willing to share them with you… And he accepted.<\/p>\n

So on each Friday going forward, you can expect a new video from Eoin Treacy, sharing his newest trading ideas and off-the-cuff market insights. Check it out below, and let us know what you think of it right here<\/a>.<\/p>\n

Eoin’s Insights<\/strong><\/h2>\n

Hey Market Minute<\/em> readers, Eoin Treacy here with some market commentary.<\/p>\n

Today, I\u2019ll be discussing some companies in the Solactive Stay At Home US Index, inflation, and the trades to watch for post-pandemic. Just click below to watch\u2026<\/p>\n

<\/a><\/p>\n

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