Small Cap Investing: A Recession Proof Sector to Consider

January 3, 2019, By fierceinvestor,

To call it a mega-trend would be an understatement.

On October 15, 2007, the very first baby boomer filed for social security benefits.

Right behind her, 80 million other baby boomers prepared to do the same thing for over the next 20 years, clearing out their retirement accounts, spending billions of dollars to keep their bodies going another decade or two. This group expects to have longer, more active lives.

And that means they’ll spend heavily to keep their bodies in tip-top shape.

More than 10,000 baby boomers hit retirement age every day, and nearly 75% of them expect to live well into their 80s… even 90s.

Retailers, marketers, doctors, gym equipment companies, and hair experts alike have already picked up on this trend, as 80 million baby boomers spend whatever it takes to keep their bodies up to par.

Baby Boomers are not only exploring new ways to stave off signs of aging, they are looking to postpone health-related decline and even death.

And if you’re in the right place at the right time, the windfall profits are endless.  Because — let’s face it — making money from this solid, unbreakable trend couldn’t be any easier.

That’s just part of the reason biotech and pharmaceutical stocks have exploded.

And that growth may not slow for quite some time for two reasons, in addition to the baby boomers.

Reason No. 1 – Mergers and Acquisitions

In just the first quarter of 2018, merger activity rose 16% year over year. Merger activity is likely to push production rates higher and raise industry profits.  Celgene’s agreed takeover of Impact Biomedicines in a deal worth up to $7 billion, Takeda Pharmaceutical’s plan to buy TiGenix for $630 million, and a recent announcement that Sanofi will buy Ablynx for $4.8 billion got 2018 off to quite a start, according to Reuters.

Reason No. 2 – Impressive New Innovation

Applied Genetic Technologies (AGTC) is working on a gene therapy platform to develop genetic therapies for patients suffering from rare and debilitating diseases.

TRACON Pharmaceuticals (TCON) is developing therapies for wet, age-related macular degeneration (AMD), which affects a good number of those retiring baby boomers.

These are just two small cap examples.

A Chance for 1,000%+ Wins in a Recession-Proof Sector

In short, the biotech sector can be a very profitable investment.  In fact, we’ve seen quite a few small cap stocks likes of biotech and pharmaceutical explode over the last few years simply on the story of an aging population.

  • Mirati Therapeutics (MRTX) skyrocketed more than 1,800%
  • Endocyte (ECYT) ran more than 1,100%
  • CymaBay Therapeutics (CBAY) jumped 865%
  • Vanda Pharmaceuticals (VNDA) soared nearly 2,500%

Those are the types of opportunities no one should ignore.  And it’s why we have a close eye on biotech and pharmaceutical small cap names.

Leave a Reply

Your email address will not be published. Required fields are marked *