Legg Mason's Bauman: The stocks to continue the biotech rally

Evan Bauman, co-manager of the $3.2bn (£2bn) Legg Mason ClearBridge US Aggressive Growth fund, is still seeing value in blue-chip biotechnology firms in the US despite the huge rally in the wider sector.

Over the past two years alone the NASDAQ Biotechnology index has risen by 87%, giving fresh impetus to a rally that first began in 2009. The index has risen some 250% over the past five years. Bauman (pictured) emphasised there is a marked difference between small- and mid-cap biotech names and the larger blue-chip companies, which he says remain cheap. They make up 16% of the fund's 18% exposure to biotech. "Biogen Idec, for example, is trading on less than 22x 2015 estimated adjusted earnings-per-share and has multiple promising pipeline items," the manager said. "Amgen, too, has...