The biotech market has not been faring well recently. This is mainly due to the fact that these companies are the paragon of “we don’t make money today.” So, while they develop potentially life-changing drugs and technology, it’s all about the monetary value of the products in the future.
Companies reliant on future cash flows, like biotech stocks, were hit especially hard in the market selloff.
But for companies with good technical signs and fundamentals, we’re still seeing great buying opportunities in the sector.
About 90 biotech stocks are trading below their cash positions. This simply means they’re trading below the amount of cash they have on their balance sheet.
This is an all-time high for the sector, which peaked at 20 stocks in 2009. But a broader uptrend started in the summer of 2015 and will continue to rise over time.
In short, the biotech sector is technically oversold but fundamentally undervalued. And this is creating some great buying opportunities right now.
Watch the full episode at Hypergrowth Investing on YouTube.