asti schreef op 16 januari 2016 16:03:
[...]
“The end-user demographics have never been more favorable,” he says. Cancer-drug spending may rise to $147 billion by 2018, from about $100 billion last year. “That’s just explosive growth,” says Loncar.Explosive growth doesn't necessarilly mean explosive profits.
“There’s panic in the market overall, and everyone has left everything that is risky. This has nothing to do with the fundamentals,” says Garren. Everyone has left is kind-of a big statement.. maybe they are still leaving?
How cheap? The big four in the space, or Gilead, Biogen, Amgen AMGN, -1.21% and Celgene CELG, -2.42% on Jan. 13 traded about as low as they have in over a decade, or at 13.8 times earnings, compared to 18 last July, points out Yook. “That’s remarkable,” he says. “Valuations have gotten silly, but the industry is healthy. The problem is, volatility begets volatility. You have investors who just can’t take the pain anymore.”
Problem with this is that p/e ratios might be numerically low compared to the 10 previous years, but I think the companies mentioned aren't growing anywhere near the rate they were growing in the previous years.
Besides, in a crisis I guess earnings can take a blow?
Lastly I wonder what the really low p/e ratios are historically, maybe ten years doesn't tell us enough?
Honestly I don't know enough about (macro) economics (who does really) and the biotech industry and its valuations to really speak on it. That's what makes me extra cautious when it comes to investing especially in the big companies at this point in time.