This article series provides a monthly dashboard of industries in each sector of the GICS classification. It compares valuation and quality factors relative to their historical averages.
Executive summary
Combining 3 valuation ratios, biotechnology looks undervalued by about 40% relative to its historical averages. However, profitability measured in return on equity is far below the historical baseline. Metrics are mixed for pharmaceuticals: price/earnings and price/free cash flow are excellent, but price/sales and return on equity are very bad. Other healthcare industries are significantly overpriced. Healthcare equipment is the worst one combining all metrics. Life science