Are Better Days Ahead for Mannkind?

Focus: HEALTHCARE

Nate Pile Image Nate Pile Editor, Nate’s Notes and The Wagmore Advisory Letter

Nate Pile takes a look at a long-standing biotech recommendation that has had a very rough few years; nevertheless, the editor of Nate’s Notes continues to believe in the long-term promise of its inhalable form of insulin for diabetics.

Steve Halpern:  Our guest today is Nate Pile, editor of Nate’s Notes.

How are you doing today, Nate?

Nate Pile:  Fine, thanks, good to be here.  

Steve Halpern:  Well, thanks for joining us.  Now, you’ve covered a broad array of stocks and sectors over the past 28 years but have a noted background in the buyer technology sector.  Could you share a current outlook on this space?

Nate Pile:  Sure, however, I think to answer your question it’s important to remind people that it’s really a two-pronged question.

On the one hand, you can look at the sector from a fundamentalist standpoint and from that angle, things look great, probably the best they’ve been in the, again, almost three decades I’ve been following the sector.  

There’s plenty of money available for companies with good ideas.  There’s a lot of great science going on, etc.  

However, one of the things that I learned over the years is that it’s a sector where stocks tend to only spend 10% to 15% of their lives in what you might call fair value.

The other 85%-90% of the time is spent trading from extreme undervalued levels to the extreme overvalued levels and back again as fear and greed take turns in the spotlight, the traditional investor emotions and there’s probably no sector that’s more driven by them than biotech.  

Unfortunately, we’ve been in a bull market now since 2009 or 2012, depending when you want to start measuring it from and consequently, we’re due for a bear market.  

If you look at the sector, it kind of peaked out last summer and has been declining ever since and this means that even though, for example, I still like Celgene (CELG) a lot -- a stock we’ve had in the newsletter since 1995.