- Small cap biotech (SBIO) got so hot in the bull market period of 2011-2015 that it acquired a high-flying growth reputation closely associated with big tech and the FAANG stocks.
- This reputation, pairing biotech with big tech as similar growth sectors, has persisted in the mainstream financial media and in many people's minds.
- But the reality of SBIO's and big tech's actual relative valuations since 2015 to the present day in spring 2021 have changed dramatically.
- The relative valuation of SBIO to QQQ has fallen from as high as 0.36 in 2015 all the way down to only 0.15 right now. That represents quite a bargain valuation for small cap biotech relative to the popular big tech sector and the FAANG stocks today.
- With the current relative valuation still being so close to the all-time long-term triple bottom level, in my view right now represents an excellent time to rotate funds away from big tech and into small cap biotech.
For further details see:
SBIO: Don't Look Now, But Small Cap Biotech Is Actually A Relative Bargain Value Buy Again