3 Mistakes to Avoid When Investing in Biotech Stocks

Biotech stocks are risky, but they're also a great way to pack your portfolio with a bit more growth potential than it might have otherwise. Unlike big pharma companies, biotechs rarely have significant sales revenue from products, so they can be hard to value. Still, one of the best -- and worst -- things about these stocks is that the right headlines can drive them to grow -- or drop -- by 50% or more overnight.

Figuring out which company is going to have which outcome isn't easy, though it can be possible if you're willing to devote time to it. So if you're going to dabble in the world of biotech stocks, you'll need to be on your A-game -- and that means avoiding these three common mistakes.

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Source Fool.com