Damage Assessment: Some Outperformers Among the Wreckage

As 2016 has ushered in one the worst stock market performances in recent history, investors and market pundits are assessing the damage. The broad market as measured by the S&P 500 is down 5.8 percent (see table below). The healthcare sector underperformed and was down 8.5 percent. This underperformance is partially due to substantial declines in many Biotech/Pharma issues. The Biotech ETF (IBB) is down a whopping 22.6 percent. Other healthcare companies suffered some pretty steep declines including McKesson, Biogen and Vertex.

On the other hand, among the wreckage, there were a few notable outperformers and some that actually made money during the atrocious start to this year. Edwards Lifesciences, Johnson & Johnson, Stryker and United Health posted gains year-to-date. Issues like Merck and Aetna, while down, still outperformed the SP 500 ETF (SPY) and the healthcare sector ETF (XLV).

Seasoned investors usually use these declines to begin accumulating positions in some of their favorite companies. After all, if you went to a car dealer to buy a new car and the salesman said he’d give you 10 percent off, you’d jump at the opportunity. In the stock market though, people tend to get excited and buy when prices are dramatically higher, and when things go on sale, they lose interest. So if you want to make a long term commitment to Biotech or other quality healthcare issues, the sector is now holding an early Spring sale.

All the best,
Dave Lerman

Early Spring Sale & Performance Measures
Stock or Index Ticker YTD (2/19/16) Price Return
Edwards Lifescience EW 9.2
Stryker SYK 5.5
Johnson and Johnson JNJ 1.4
United Health UNH .03
Medtronic MDT -2.0
Aetna AET -4.3
Merck MRK -5.1
S&P 500 ETF SPY -5.8
Becton Dickinson BDX -6.0
Thermo Fisher Scientific TMO -8.2
S&P Healthcare Sector ETF XLV -8.5
Biogen BIIB -14.7
McKesson MCK -21.8
Biotech ETF IBB -22.6
Vertex VRTX -30.0

Source: In Sickness and Wealth Research, Bloomberg

This article has 4 comments

    • Dave Lerman

      We try to keep our finger on the pulse of the healthcare sector and will always provide data on how the sector performs (good or bad) relative to the overall markets. We get our information from being immersed in the markets each and every day. We also have access to the top research in the financial world, as well as the news services and Bloomberg for great databases that allow us to comb through data and come up with actionable investment themes.

      Our goal is to provide research and insight that saves investors time and allows them to wisely choose their own investments in the healthcare sector as we chronicle our successes and failures so others can learn. Thanks for reading and providing feedback. We invite you to subscribe and offer a 3-month trial, as well as an annual subscription.

    • Dave Lerman

      Thanks so much for the feedback. Spread the word… we are building a following and subscriber base. We will continue to post useful and actionable content going forward.

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