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How to Protect your Wealth by Investing in AI Tech Stocks

Neurocrine Biosciences - NBIX - Low Risk Biotech X10 Stock

Companies / BioTech Jul 03, 2021 - 05:00 PM GMT

By: Nadeem_Walayat

Companies

Life Sciences Biotech Smaller Cap High Risk Stocks Investing Binge

Why has my focus shifted to biotech stocks and not more tech stocks?

Firstly, I have been investing in biotech stocks for DECADES, it's just that since 2015 my focus shifted to the emerging AI mega-trend to make sure I was invested to capitalise on a trend that was clear to me would span DECADES, at the time I thought I was probably getting in late on the AI Mega-trend but clearly that is always the case! WE ALWAYS THINK we're late to the party but this trend is going to run right into the end of the 2030's

This also explains why I hold the likes of GSK and JNJ amongst a string of smaller cap biotech stocks many of which have been disappearing from my portfolio over the years usually due to being taken over as it looks likely to be the case for GW Pharma later this year. So I need to replenish this once much loved and now neglected stock sector with a string of new smaller cap high risk stocks for the next 5 to 10 years.

Secondly, our beloved AI stocks have been BID UP to high valuations, yes including Google, so they are not CHEAP, even after a 10% to 15% correction i.e. the likes of Microsoft and Amazon are discounting a lot of future earnings growth! Of course that does not necessarily mean that they are about to fall to what I would consider to be fair value let lone cheap levels as they did during March 2020 because at the end of the day they are GOOD stocks so usually command a healthy premium to invest in.


However, during the course of this exercise I am repeatedly finding that the biotech stocks are tending to be greatly unloved! Especially when one compares them to the barmy valuations that many of the smaller cap tech stocks that populate the likes of ARK INVEST have been lifted to such as TESLA and SQAURE and most of the rest.

So this does appear to be an opportune time to go on the hunt for smaller cap higher risk biotech stocks.

RISK RATINGS

I am also adding a risk rating to the high risk stocks where 1 is lowest risk and 10 highest risk in terms of something going wrong and the stock effectively crashing into becoming a penny stock or even going bust within the next 5 years. This is based on the sum of all my analysis of each stock and given my risk averse nature then most of the stocks will have a low probability of actually going bust within the next 5 years. Still this rating will give an extra measure of risk vs reward when entertaining potential position sizes.

Neurocrine Biosciences - NBIX - Low Risk Biotech X10 Stock

This biotech stock is focused on treating neurological and endocrine disorders and has been around since 1992, so has stood the test of time, trades on a market cap of $8.8bn and a PE of 22 so the stock at least makes a profit. The company shows consistent revenue growth though profits are erratic, estimated earnings growth for the next 3 years is 30%. The company has good debt to equity ratio of just 26.7%. So for a small cap high risk stock the company looks rock solid!

The stocks in a strong trading range of $135 to $70 pending a breakout HIGHER. Current price puts the stock right near support so AT a buying level right now primed for another run at the high! This price pattern is not what one would expect to see in a high risk stock which is a function of the fact that the pharma sector is unloved! So what do you think is going to happen to the stock price when the sector becomes loved with stocks such as this flying as high as the tech sector is right now to trade on 100X+ earnings! That's X5 NBIX's current price without any increase in earnings! For the biotech stocks have just as much future potential as the tech sector has! As for buying levels I would say right now at $92 is a buying level, then not too distant is $84, and then a more distant $74.

The bottom line is NBIX has been around for decades so has a good track record, and is fairly priced right now and is trading AT a buying level. So I am a buyer of NBIX! as it definitely has the potential to X10 with little downside risk to $70 at the worst against $92. I don't think the stock is going to stick around current levels for long.

This article is an excerpt from my recent extensive analysis that concludes in my latest biotech stocks with the potential to X10 over the coming years Five More Small Cap Bio and Tech Stocks to Invest for 2021 and Beyond! has first been made available to Patrons who support my work.

Topics Include:

  • Invest and Forget
  • Stock Market Early Summer Correction Review
  • AI Stocks Strength vs Weakness
  • RAMPANT MONEY PRINTING INFLATION BIG PICTURE!
  • HIGH RISK STOCK BUYING LEVELS
  • RISK RATINGS
  • WESTERN DIGITAL - WDC $71 - CHIA! - Risk 1
  • Life Sciences Biotech Smaller Cap High Risk Stocks Investing Binge
  • Biotech stock 1 - Cheap Low Risk Pharma - Risk 1
  • Biotech stock 2 - HIGH RISK GENE EDITING - Risk 9
  • Biotech stock 3 - Low Risk 2
  • Biotech stock 4 - X10 for Max Risk 10
  • High Risk Stocks Portfolio Buying Levels
  • Covid India Black Mold Epidemic
  • Bitcoin and Raven Coin Buying Levels

So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.

Inlcuding access to my latest analysis -

Bitcoin Bear Market Trend Forecast 2021 and Model Crypto Portfolio Buying Levels

  • Investing in the Tulip Crypto Mania
  • Bitcoin Price Trend Forecast Review
  • Lessons Learned
  • Cathy Crypto Wood's View on Bitcoin
  • BITCOIN HALVINGS TREND TRAJECTORY
  • Stock to Flow Infinity and Beyond!
  • Bitcoin, Crypto's and the Inflation Mega-trend
  • Black Swan 1 - Will Crypto's Get Banned?
  • Black Swan 2 - GOOGLE
  • Black Swan 3 - USDT Tether Un-Stable Coin Ponzi Schemes!
  • BLACK SWAN 4 - Bitcoin 51% Network Attack by China?
  • Black Swan 5 - Bitcoin is Already Obsolete
  • US Trending Towards Hyperinflation
  • BITCOIN TREND ANALYSIS
  • Bitcoin Bear markets analysis - How low could she blow?
  • Bitcoin Trend Forecast
  • Bitcoin Long-term probable Next bull market price target
  • Alternative Scenarios
  • My Crypto Bear Market Investing Strategy
  • Crypto 1 - Ethereum (ETH) $2600
  • Crypto 2 - Bitcoin $40,375
  • Crypto 3 - Ravencoin $0.078
  • Crypto 4 - Cardano $1.59
  • Crypto 5 - Pokadot $25
  • Crypto 6 - ChainLink $26
  • Crypto's 7 to 10
  • Creating The Perfect Crypto
  • How to Invest in Crypto Without Getting SCAMMED
  • CHIA SCAM COIN
  • Binance vs Coinbase
  • Have ARK Invest Funds Bottomed?

My analysis schedule includes:

  • More X10 Biotech Tech Stocks - 60% done
  • UK House Prices Trend Analysis - 10% done
  • How to Get Rich! - 70% done
  • US Dollar and British Pound analysis
  • Gold and SIlver Price Analysis

Again for immediate access to all my work do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.\

And ensure you are subscribed to my ALWAYS FREE newsletter for my next in-depth analysis.

Your analyst investing in biotech stocks.

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2021 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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