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Small-Caps Are Topping the IBB Portfolio

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Dec. 22 2015, Published 11:39 a.m. ET

Small-cap performances led IBB to rise marginally

The markets turned green on Monday, December 21, 2015, after a break of two days. Oil fell to its 11-year low, and Brent futures were trading at $36.35 per barrel. Market movements were driven by tech stocks and healthcare service provider stocks as 6 million people signed up for subsidized health insurance, commonly known as Obamacare. The S&P 500 rose 0.8%, and the Dow Jones Industrial Average rose 0.7% for the day.

Biotech stocks and ETFs had a good day on December 21 and rose marginally. The iShares Nasdaq Biotechnology ETF (IBB) rose 0.2% for the day. IBB closed at $332.13 and was trading marginally lower than the 100-day moving average of $335.33. It was trading above the 20-day moving average of 331.20.

Volumes were down, as expected, for the holiday season and might remain the same throughout the remainder of the year. IBB witnessed a trading volume of ~742,000 shares compared to the five-day average trading volume of ~2 million shares per day.

The above chart indicates the moving averages at various intervals for IBB, the SPDR S&P 500 ETF (SPY), and the top and bottom performing stocks of the day.

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Leaders and laggards

Aegerion Pharmaceuticals (AEGR) and Agios Pharmaceuticals (AGIO) were the top performers with returns of 15.5% and 14.15%, respectively. The Medicines Company (MDCO) was the worst performer with a return of -9.1%.

AEGR closed at $10.41 and rose 15.5% on December 21. However, the stock was still trading below its 100-day moving average. Year-to-date, AEGR has returned -50.3%. It recorded trading volumes of ~1.8 million shares traded for the day. The book value of AEGR is $5.01 per share. With its current price, the stock is trading at a price-to-book value (or PBV) of 2.08x.

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