July 10, 2014
Share price performance in Q2 and H1 2014 for the Canadian Healthcare Sector (Part 1):
General loss of momentum but our Therapeutics – Commercial subsector of companies still surging
In Q1, we asked whether there had been a fundamental strengthening of the sector’s performance and outlook or was there substantial, and perhaps unsustainable, momentum in this performance. For the 99 companies starting 2014 with share prices of $0.10 or higher, decliners significantly outnumbered advancers by 63 to 36 in Q2. There were only 8 companies with share price increases of 40% or more, versus the 25 companies in Q1, and 11 companies had share price declines of 40% or more, versus only 2 companies in Q1. Overall, Q2 2014 share price performance reflects a loss of momentum in the sector except for those companies benefiting from investors looking for the next Paladin Labs – an acquisition target with ‘tax inversion’ potential.
In this blog, I am going to comment on the Q2 and H1 performance of 39 companies with share prices of $1.00 or more to start 2014.
Q2 2014 performance
H1 2014 Performance
The highlighted line in the following table shows what is driving the sector.
Will this renewed interest in the Canadian healthcare industry and the profits made by investors in these companies trickle down to the development stage biotechnology companies? Unfortunately, I do not think this will happen with the Canadian institutional investors, who are generalists and not willing to take the risk with development stage companies. With retail investors, some will probably be willing to reinvest some profits in biotechnology companies.
[The author and his immediate family members may have long or short positions in the shares of some companies mentioned in or assessed during the preparation of this blog. Past share price performance may not be an indicator of future share price performance. This blog does not consider the investment objectives, financial situation or particular needs of any particular person. Investors should obtain professional advice based on their own individual circumstances before making an investment decision.]