Market Conditions Remain Poor, But I'm Targeting These 3 Stocks
Here's what the market desperately needs right now and my main strategy for navigating it.
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
Unsurprisingly, a gap-up open on Monday morning is being sold. When the market is as volatile as it has been lately it is typically a good idea to reduce positions into strength rather than trust that positive momentum will develop.
After the initial selling, we will see if there is underlying support, but news risk is extremely high. What the market desperately needs right now is news about trade deals with individual countries.
The first few deals will establish the framework for the dozens that will follow. The key issue in these deals isn't the trade imbalance but all the secondary issues that impact trade, such as currency issues, local regulations, VAT taxes, etc. Addressing those problems will be difficult.
There is a very high amount of negativity out there, and as I discussed in my morning post, it isn't just about tariffs. There is concern about a recession and the recent action in bonds and the dollar. Unless there is something very positive in upcoming trade deals those issues are not going away soon.
My main strategy right now is to look for opportunities to add to core positions that I have been holding through the recent volatility. Uber Technologies UBER is one that I think will navigate the current issues fairly well, and I'm looking to add to it on further pullbacks. ADMA Biologics ADMA is another name that I want to build up further.
A Biotech to Buy?
I will have more on this later this week, but one group that I believe may benefit from the tariff and economic issues is biotechnology IBB. Biotech has been weak for years and has recently hit multiple-year lows due to concerns about Robert Kennedy as the new leader of the FDA. It has also been a problem because there has been no interest in buying the illiquid group during the tariff battles.
The biotech sector should be relatively protected from the tariff issue, and the group is now at a historically low valuation. I'm not predicting a major turn just yet, but I believe there is some significant support building that will be a foundation for a major cycle turn.
Today, I want to highlight one name in the sector that I'm accumulating right now: BridgeBio Pharma BBIO. The company aims to develop transformative medicines for genetic diseases and cancers with clear genetic drivers. It uses a "hub-and-spoke" model and manages a portfolio of programs through subsidiaries to diversify risk and accelerate drug development. The name "Bridge" is used because the company seeks to bridge advancements in genetic science with unmet patient needs.
The company has a number of programs that are advancing well, but the most interesting is a drug called Attruby, which treats a condition where protein builds up and causes heart failure. SAttruby just started selling recently and is seeing a very strong uptake with physicians versus a competing drug from Pfizer PFE.
Fifteen analysts have buy ratings on BBIO stock, and the average target price is $55. I expect robust sales to be reported in the first quarter earnings report, which is due around May 1.
Stocks like BBIO should be relatively immune to tariffs and economic issues. I'll discuss more of them in future columns.
At the time of publication, Rev Shark was long UBER, ADMA and BBIO.
