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Is today's Nasdaq back in "bubblicious" territory?

With the Nasdaq Composite recently hitting 5,000 and trading near its record-high hit in March 2000, there's inevitable talk that the index is in bubble territory.

That makes sense, perhaps, when one considers the so-called bursting of the technology bubble in early 2000, a popping that prefaced the entire U.S. economy slipping into recession the following year.

This go-round, some of the bubble talk centers on the nearly 270 biotech companies listed on the Nasdaq, with some of those firms garnering multibillion dollar market valuations without one product for sale.

"It does seem like a lot of the biotech companies have gone up in a strange way, considering a lot of the drugs aren't approved, especially for the smaller companies," said JJ Kinahan, chief market strategist at TD Ameritrade.

The share price of Spark Therapeutics (ONCE), for instance, doubled in its market debut in January, giving it a market valuation of $1.2 billion.

"The word bubble implies something is full of hot air, that there isn't substance," said Jason Kantor, a Credit Suisse analyst who covers Spark Therapeutics, a biotech that's developing a gene therapy treatment for a specific disease that causes blindness.

"This is a company that is going to have phase 3 data in the second half of the year for an unmet medical need. I don't think it is fluff without substance. It's both a technology story and a product story."

Like technology, the biotech sector has investors betting on products and services still in the works.

"What is underpinning a multiyear run in biotech has been the robust product cycle. The number of new products, innovative technology, the number of blockbuster drugs, the number successfully marketing their own drugs, all are at record numbers," said Kantor.

This success has led to infusions of venture and other investor capital, which is helping fuel innovation and creating a virtuous cycle that has left the industry overall healthier than ever, in terms of some of these companies' balance sheets, Kantor pointed out.

Investing in either tech or biotechnology is "not for the faint of heart. This is not a dividend play with these companies," said Howard Silverblatt, senior index analyst with S&P Dow Jones Indices. "You have to monitor the investment. It's more than just, 'gee I'm doing dividend strategies with utilities.'"

The current environment of record-low interest rates makes placing bets on likely acquisition targets all the more appealing, and deals in biotech are helping drive up valuations. The latest large example is Wednesday's agreement by AbbVie (ABBV) to acquire cancer drug developer Pharmacyclics (PCYC) for $21 billion.

"We're in a period of easy money. A lot of companies are sitting on cash, and a lot of M&A activity takes places in biotech, especially when companies come up with drugs that larger companies don't have," said TD Ameritrade's Kinahan. "We're going to continue to trade at multiples that some would say are undeserved, but there's a built-in acquisition factor. Like tech, it exists here."

That said, once interest rates -- or borrowing costs -- begin to climb, what could be called an "acquisition premium" would come out of the stocks, said Kinahan, who points to the irony of viewing the biotech sector as "interest rate sensitive."

"There is nothing bubblicious about the biggest names in the Nasdaq. You can certainly highlight some with irrational exuberance, like an Amazon or a Netflix, but the Nasdaq 5,000 now versus last time, it's a different world," said Art Hogan, chief market strategist at Wunderlich Securities.

Fifteen years ago, the price-earnings ratio -- a valuation measure reached by dividing a company's current share price by its earnings per share -- was trading "call it in round numbers 90 times. The Nasdaq Composite is trading at 21 times this year, and 18 times next year," said Hogan in dismissing the idea that the overall index is vastly overpriced.

Still, the iShares Nasdaq Biotechnology (IBB), a fund composed of biotechnology and pharmaceutical companies listed on the Nasdaq, is up 31 percent from a year ago, and could be "topping out," said Hogan.

"Any index that triples over two years is in frothy territory," said Peter Boockvar, chief market strategist at the Lindsey Group, referring to the IBB fund.

The companies in the fund tend to be trade at loftier levels because of factors such as the Affordable Care Act, which means "more utilization of their product, which is true for all health care stocks," said Hogan.

Another reason is the sector involves companies in various phases of testing products that may or may not succeed in curing various diseases. "I've got something that cures cancer, in a phase-two trial, it's hard to put a value on that," Hogan said.

The Federal Reserve's monetary policy is behind the entire stock market being in a bubble, believes Boockvar.

"The source of the bubble is in fixed income and central-bank balance sheets, that's where the real excess is. The problem is the cost of money is an important component in the valuation of stocks, so stocks by default are in bubblicious valuations," Boockvar said.

An "economic and market construct built on massive [quantitative easing] and low rates" won't end well, Boockvar warned. "Earnings are falling, economic data continue to be miss expectations outside of payrolls, and interest rates are now moving higher. That's not a good backdrop for higher stock prices."

Because the Nasdaq Composite hit 5,000 for "about 45 minutes," people are talking about bubbles, defined by some as "any asset plan that goes up that they don't own," Hogan quipped. "The Nasdaq in general, and biotechs in particular, might be looking frothy, but that's a different statement than a bubble."

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