In the past few years, a strange new “defensive” asset has appeared in the market.
Investors use the “defensive” label to describe businesses that enjoy steady demand for their products – like food, cigarettes and electric utilities.
Ethanol’s future once looked bright. But since 2006, when President Bush pledged hundreds of millions of dollars to treat America’s dependence on oil imports, ethanol stocks have crashed big time.
Stock in US ethanol producer Pacific Ethanol (NASDAQ:PEIX) sold for more than $18 in November 2006. It now sells for just over $1.60. Meanwhile, investors in ethanol producer VeraSun (NYSE:VSE) lost nearly 70% this year.
But Rob Fannon says there’s a bigger ethanol bubble coming – one that can make big bucks for early investors…
There has been a lot of strong recommendations around biotech lately on Contrarian Profits.
Phase 1 Investor editor Rob Fannon recently wrote that biotech was one of the few market sectors to show positive returns as many other stocks were getting hammered. He sees great values in the sector.
There’s a good reason for this strength. A struggling economy won’t hurt biotech and medical as much as, say, an automaker, retailer, or restaurant chain… And biotech is one of the few industries showing solid sales growth.
Swiss drug company Roche (OTC:RHHBY) may not get its hands on San Francisco-based biotech outfit Genenetech (NYSE:DNA) as quickly as it had hoped.
Genetech has formed a special committee of independent directors to evaluate the $89-a-share acquisition offer from Roche, which already owns 56 percent of the US biotech firm.
If the deal does go through it may be bad news for Roche and Genentech shareholders, according to Phase 1 Investor editor Rob Fannon in The Growth Stock Wire. But it would be good news for the biotech industry as a whole…
While I believe the bid is a bad move for Roche – and not a great proposal for Genentech shareholders – this mega-deal is actually good for the entire biotech industry… and its investors.
With Genentech…
Another strong play from medical stock expert Rob Fannon.
Rob says that although Big Pharma stocks are cheap right now – bellwether Pfizer (PFE) is cheaper than it’s ever been – drugmakers are racing off the side of a cliff.
This is because when patents expire drugmakers loose billions of dollars to generic manufacturers.
But biotech drugs can’t be copied easily. And the sector is in an uptrend. Rob recommends using a biotech ETF to play this trend.
Big Pharma is in trouble. Generic competition, patent expirations and slowing sales are all eating into profits.
So how can you turn a profit in this turbulent sector? By investing in contract research organisations, or CROs, says biotech expert Rob Fannon. When the big pharmaceutical companies outsource research to CROs they get paid whether or not the new drugs ever make it to market.
There’s another way to profit too – contract sales organizations, or CSOs. They’re another way for Big Pharma to outsource, but instead of doing research they sell.