XLV Mid-Cap Stocks: Why Mallinckrodt Fell Due to Profit-Booking



XLV mid-cap stocks

The Health Care Select Sector SPDR ETF (XLV) has very low exposure to mid-cap stocks. As of April 12, 2016, XLV only had six mid-cap stocks in its portfolio. This is 11% of its entire holdings. In terms of weight, XLV mid-cap stocks account for ~1.5% of XLV’s entire portfolio. XLV mid-cap stocks had a mixed day. Four stocks advanced and two stocks declined from the previous day’s closing.

The above graph shows the daily changes in XLV mid-cap stocks, XLV, and the SPDR S&P 500 ETF (SPY). So far in April, XLV’s mid-cap stocks are down by 3.4%. SPY has gained 0.2% for the same period.

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Mallinckrodt fell due to profit-booking

Mallinckrodt (MNK) fell by 4.5% due to profit-booking. It closed at $58.40. The stock remained volatile on the backdrop of Valeant’s (VRX) episode. Mallinckrodt’s business model is similar to Valeant. The stock is trading below its 20-day moving average. It witnessed a trading volume of ~3.1 million shares per day compared to the three-month average trading volume of ~2.8 million shares per day. Mallinckrodt has a book value of $46.13 per share. At its current price, the stock is trading at a price-to-book value of ~1.3x. On a PE (price-to-earnings) basis, Mallinckrodt is trading at a discount compared to its peers. It’s trading at a forward PE ratio of 7.2x in 2016—compared to Mylan’s (MYL) 9.4x, Baxter International’s (BAX) 27.8x, and Baxalta’s (BXLT) 18.8x. Mallinckrodt has a weight of 0.3% in XLV’s portfolio.


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