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Profit Booking Leaves the iShares US Medical Devices ETF (IHI) in the Red

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May. 20 2016, Published 10:59 a.m. ET

What just happened to IHI?

Markets have been moving up and down like a seesaw. On May 19, 2016, markets declined, with the Dow Jones Industrial Average and the SPDR S&P 500 ETF dropping by 0.5% and 0.3%, respectively. The healthcare and biotech sectors, which witnessed a jump the previous day, saw some profit booking and wound up in the red. The iShares US Medical Devices ETF (IHI) fell by 0.8%, underperforming the SPDR S&P 500 ETF.

(IHI) in the Red" src="https://media.marketrealist.com/brand-img/imgix/0x0/uploads/2016/05/Part-1-Graph-05-19-16.png?auto=compress%2Cformat&fit=scale&h=440&ixlib=php-1.2.1&w=1024&wpsize=large" alt="Profit Booking Leaves the iShares US Medical Devices ETF (IHI) in the Red" width="620" height="266">

The iShares US Medical Devices ETF closed at $128.15 and was trading below its 20-day moving average of $129.30. On a YTD (year-to-date) basis, the ETF has risen by 4.7%, and in the three-month period, it has returned 11.1%, outperforming the SPDR S&P 500 ETF, which has risen by only 0.2% YTD.

IHI’s 52-week low is $100 while 52-week high is $131.46. IHI holds 47 stocks in its portfolio. Among them, 14 stocks advanced and 33 stocks declined on May 19 from the previous day’s close.

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Outperformers and underperformers

On May 19, the top performers in IHI included Insulet (PODD) and Wright Medical Group (WMGI), which gained 4.5% and 2%, respectively. Insulet’s stock rose on the news that its CEO (chief executive officer) Patrick Sullivan bought 45,000 shares. The stock closed at $28.22 and was trading below its 20-day moving average of $30.80. YTD, the stock has declined by 25.4%. However, the RSI (relative strength index) of the stock is at 29, indicating that the stock has temporarily become oversold. Insulet has a weight of ~0.5% in IHI’s portfolio.

In a press release on May 19, Wright Medical Group announced that “it will present at the Jefferies Global Healthcare Conference on Thursday, June 9, 2016, at the Grand Hyatt Hotel in New York, New York.” The stock gained 2% on this news and closed at $18.34, trading below its 20-day moving average of $18.60. YTD, the stock has fallen by 24.2%. Wright Medical has a weight of 0.5% in IHI’s portfolio.

The bottom two underperformers of IHI were Cantel Medical (CMN) and Baxter International (BAX), which declined by 3.5% and 4.3%, respectively, on May 19. Baxter’s stock fell as the Baxalta arbitrage exchange opportunity ended.

Cantel Medical’s stock dipped on profit booking, with higher trading volumes of ~253,000, as compared to the three-month average trading volume of 185,000. YTD, however, the stock has risen by 3.9%. Cantel Medical and Baxter have weights of 0.7% and 4.6%, respectively, in IHI.

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