Investors should put their money in small- to mid-cap biotech stocks as rhetoric about changing the U.S. health-care system ramps up during the Democratic primary debate season, Jefferies analyst Michael Yee said Friday.
“The big biotechs have to buy the big and small biotechs, and that’s where most [health-care] investors have been playing,” Yee said in an interview on CNBC’s “The Exchange. “
Health care overall has been one of the worst-performing sectors in the stock market this year. This is in part because of concerns about 2020 Democratic proposals for “Medicare for All,” which calls for eliminating private health insurance and replacing it with a universal Medicare plan.
The Health Care Select Sector SPDR Fund, an ETF that tracks the health-care industry’s biggest companies, has risen by just 7% year to date as of Friday’s close, significantly lagging the broader market indexes. The S&P 500 has risen 17% over that same time period.
Meanwhile, biotech stocks are outperforming….