XLV Mid-Cap Stocks Witness Profit-Booking

The mid-cap stocks of the Health Care Select Sector SPDR ETF (XLV) fell collectively by 2.6%. They underperformed XLV as of March 8, 2016. XLV has very limited exposure to mid-cap biotech stocks. It only has seven stocks in its portfolio. All seven stocks fell along with the Market due to profit-booking. The mid-cap stocks account for ~1.9% of XLV’s portfolio.

The above graph shows the performance of XLV’s mid-cap stocks compared to the SPDR S&P 500 ETF (SPY) from March 3, 2016, to date. During this period, XLV’s mid-cap stocks returned -1.6%. The SPDR S&P 500 ETF (SPY) has returned -0.3% for the same period.

Mallinckrodt (MNK) was the biggest loser among XLV’s mid-cap stocks. Mallinckrodt closed at $61.92. It was trading below its 20-day moving average price of $64.9. Year-to-date, the stock is down by 17%. The stock fell due to profit-booking. It recorded a trading volume of ~2 million shares compared to the three-month trading volume of 1.99 million shares per day. The stock’s book value is $46.13 per share. With its current price, the stock is trading at a price-to-book value of ~1.3x. It’s trading at a 2016 forward PE (price-to-earnings) ratio of 7.7x. XLV’s other mid-cap stocks including Varian Medical (VAR), Perkinelmer (PKI), and Tenet Healthcare (THC) are trading at 2016 forward PE ratios of 17.4x, 17.7x, and 14x, respectively.

Mallinckrodt has a weight of 0.3% in XLV.