NEW YORK (
TheStreet) -- The biotech sector has been one of the best performing sectors this year. While the Nasdaq Composite rose 5.3% for the first six months of the year, the Nasdaq Biotech Index
rose a whopping 21.6% as of June 30. In comparison the S&P 500 Index barely eked out a positive return for the first two quarters.
Even within the red-hot biotech sector, there are superior performers. Here they are.
TheStreet paired each of these tickers with TheStreet Ratings to let you know if you should buy, sell, or hold these best performing stocks. (Note: Because of TheStreet Ratings parameters, not all stocks on this list have a rating.)
TheStreet Ratings,
TheStreet's proprietary ratings tool, projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.
Buying an S&P 500 stock that TheStreet Ratings rated a "buy" yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a "buy" yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.
Check out which stocks were among the best performers to date, counting down from 10 to one.
KYTH data by YCharts
10. Kythera Biopharmaceuticals (KYTH)
Rating: N/A
Market Cap: $1.9 billion
Year-to-date return: 117.2%
KYTHERA Biopharmaceuticals, Inc. is a "clinical stage biopharmaceutical company focused on the discovery, development and commercialization of novel prescription products for the aesthetic medicine market. KYTHERA also maintains an active research interest in hair and fat biology, pigmentation modulation and facial contouring," according to its Web site.
RARE data by YCharts
9. Ultragenyx Pharmaceutical (RARE)
Rating: N/A
Market Cap: $3.7 billion
Year-to-date return: 133.3%
Ultragenyx is a "clinical-stage biotechnology company committed to bringing to market novel products for the treatment of rare and ultra-rare diseases, with an initial focus on serious, debilitating genetic diseases. Founded in 2010, the company has rapidly built a diverse portfolio of product candidates with the potential to address diseases for which the unmet medical need is high, the biology for treatment is clear, and for which there are no approved therapies," according to its Web site.
HALO data by YCharts
8. Halozyme Therapeutics, Inc. (HALO)
Rating: Sell, D
Market Cap: $2.8 billion
Year-to-date return: 134%
Halozyme Therapeutics, Inc., a biotechnology company, researches, develops, and commercializes human enzymes.
"We rate HALOZYME THERAPEUTICS INC (HALO) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally high debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Biotechnology industry and the overall market, HALOZYME THERAPEUTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The debt-to-equity ratio of 1.32 is relatively high when compared with the industry average, suggesting a need for better debt level management. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 5.20, which shows the ability to cover short-term cash needs.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Biotechnology industry average, but is greater than that of the S&P 500. The net income increased by 43.1% when compared to the same quarter one year prior, rising from -$26.55 million to -$15.11 million.
- Net operating cash flow has increased to -$13.84 million or 21.50% when compared to the same quarter last year. Despite an increase in cash flow of 21.50%, HALOZYME THERAPEUTICS INC is still growing at a significantly lower rate than the industry average of 157.15%.
- This stock has increased by 103.94% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in HALO do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
IMGN data by YCharts
7. ImmunoGen, Inc. (IMGN)
Rating: Sell, D-
Market Cap: $1.2 billion
Year-to-date return: 135.7%
ImmunoGen, Inc., a biotechnology company, develops targeted anticancer therapeutics. It develops its products using its antibody-drug conjugates technology. The company offers Kadcyla, an antibody-drug conjugate for the treatment of HER2-positive metastatic breast cancer.
"We rate IMMUNOGEN INC (IMGN) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Biotechnology industry and the overall market, IMMUNOGEN INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Biotechnology industry average, but is greater than that of the S&P 500. The net income increased by 42.3% when compared to the same quarter one year prior, rising from -$37.45 million to -$21.62 million.
- Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
- IMMUNOGEN INC has improved earnings per share by 43.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, IMMUNOGEN INC continued to lose money by earning -$0.84 versus -$0.87 in the prior year. This year, the market expects an improvement in earnings (-$0.71 versus -$0.84).
- Net operating cash flow has significantly increased by 157.59% to $7.55 million when compared to the same quarter last year. In addition, IMMUNOGEN INC has also modestly surpassed the industry average cash flow growth rate of 157.15%.
ANAC data by YCharts
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