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July 18, 2016

Q2 2016 Share Price Performance (Part 1)

Overall, Q2 2016 share price performance in the sector was slightly positive for the companies starting 2015 with share prices of $0.10 or higher. Two companies have been deleted from the analysis – DiagnoCure is undergoing voluntary liquidation and dissolution and Stellar Biotechnologies delisted from the TSX and no longer has any Canadian link.

  • Advancers (58) and decliners (56) were essentially equal
  • Fourteen companies with share price increases of 40% or more
  • Seven companies had share price declines of 40% or more
  • The average and median share price changes were +3% and 0%

H1 2016 share price performance in the sector remained negative as a result of the Q1 performance.

  • Decliners outnumbered advancers by 70 to 44
  • Fifteen companies with share price increases of 40% or more
  • Twenty-three companies had share price declines of 40% or more
  • The average and median share price changes were -5% and -13%

An investor should ask ‘how do the average Q2 and H1 share price changes in Q2 and H1 compare with some benchmarks?’

The performance of the four benchmarks which I use are shown in this table. The two TSX indices remained positive because the price of oil increased and there was continuing positive momentum in mining company share prices. The technology and biotechnology-based NASDAQ was lower because of the substantial negative performance of the U.S. biotechnology sector due to politics, drug pricing and now revenue growth concerns.

 

In addition to questions about global capital markets, such as the impact of the BREXIT vote, there are two questions which more directly impact the Canadian healthcare sector.

  • Will any sustained momentum in the Canadian junior resource stocks keep the attention and investment interest of small cap fund managers and retail investors?
  • Although there are dramatic differences in the composition of the Canadian healthcare and NASDAQ biotechnology sectors, will continued negative performance of the U.S. sector substantially impact the Canadian sector?

 

In the next blog, I will asses the Q2 2016 share price performance of the Tier 1 Canadian healthcare 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.]

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