By Jeff Reeves, MarketWatch
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As the quarter ends, it’s time for those tired old “listicles” about the best performing stocks and worst performing stocks of the last three months.
And as a card-carrying member of the financial media, I am required to write at least one of these stories lest my license to willfully manipulate gold prices be revoked.
But while doing my dutiful end-of-quarter screening, I noticed a trend that is hard to ignore — the bubble-like ascent of biotech stocks in the last few months.
Take a look at some of the top performers since Jan. 1, all of which are in the biotechnology or drug development business:
Eagle Pharmaceuticals (EGRX) /zigman2/quotes/200611523/composite EGRX +2.07% , up 156%
Ziopharm Oncology /zigman2/quotes/200291745/composite ZIOP +1.40% , up 126%
Esperion Therapeutics /zigman2/quotes/207049816/composite ESPR +1.14% , up 124%
Foundation Medicine , up 116%
Pharmacyclics , up 110%
These are not tiny OTC companies that I have cherry-picked, by the way. The smallest has a market cap of $600 million and trades about 500,000 shares daily.
In fact, by many measures, biotech has been the best performing sector of the stock market for five years running — a feat that hasn’t been matched in the modern investing era.
Whenever investors see returns like this, they naturally start using the “B” word.
But is biotech actually in a bubble?
Chasing the narrative
The narrative behind these stocks is one of the biggest selling points. Take Biogen /zigman2/quotes/201531540/composite BIIB +0.13% , a $100 billion biotech stock that is up “only” 25% year-to-date or so compared with just 1% for the S&P 500 /zigman2/quotes/210599714/realtime SPX +1.00% thanks in large part to encouraging data regarding its potential Alzheimer’s treatment.
How can you not like a company that is on the cutting edge of medicine, attempting to cure previously uncorrectable conditions?
Where next for the euro?
It has been a wild ride, but the euro could now be in for a long period of going nowhere, BNY Mellon’s Simon Derrick tells Katie Martin. But watch out for the yen, he warns.