Biotech Hunting

Money is rotating into the most speculative corners of healthcare. 

Biotechs, specifically the unprofitable kind, have been some of the best stocks on the board for well over a year now.

This is a group with big winners and big losers. 

And it's the kind of theme where building a basket gives you a better shot at catching the winning trade than betting everything on one or two FDA announcements. 

That is, of course, unless you happen to be one of the white-coat PhD types who can read a clinical readout cold.

Regardless, the strength is unmistakable. 

Right now, the equal-weight biotech index $XBI is breaking out to new multi-year highs. 

And the most telling sign is underneath the surface: the riskier slice of the cohort, the biotechs still in clinical trials, are outperforming the names that already have products on the market.

Take a look:

This is the kind of intermarket confirmation that turns a move into a thesis and a breakout into a secular shift. 

Few other groups are showing relative strength like this. So we want to lean in.

Better yet, this is a heavily shorted group that is now in an uptrend, which only adds fuel to the fire. 

We think this will be a great pond to fish in over the coming months and quarters.

Here's what the leaderboard looks like across our biotech universe. It includes every biotech and diagnostic stock with a market cap between $750 million and $20 billion: 

It's a wide net, but that's the point. It lets us capture names at every stage of maturity, from pure-speculative binaries all the way up to buyout candidates, and everything in between.

Here are some of our favorite setups in the space: