In this article we will take a look at the 10 best vaccine stocks to buy now. You can skip our comprehensive analysis of the biopharma industry and go directly to the 5 Best Vaccine Stocks to Buy Now.
The mass COVID-19 vaccination drive has sent the stocks of publicly traded firms developing the vaccine into overdrive. In addition to the big pharma giants, there are some smaller companies along the vaccine supply chain that also stand to gain from the soaring prices. Bank of America analysts last year underlined how the firms making syringes used to inject vaccines could witness explosive growth, as well as those who planned to distribute the vaccine in the hundreds of millions across the European heartland and Asia.
Growth Catalysts for Vaccine Stocks
A research report published by Market Study at the end of last month found that the global COVID-19 vaccine market was expected to touch more than $25 billion in worth within the next three years. Industry experts cited in the study detailed that North American firms were expected to lead the market in this regard, with European and Asian firms following close behind. Market Study claimed that new outbreaks of the virus and increased governmental purchases of the vaccine were driving the positive market forecast.
Bank of America Corporation (NYSE: BAC) last year predicted that more than 1.5 billion coronavirus vaccines will be distributed across the world in 2021 as vaccine makers ramp up production to meet increased demand. Shares of firms like Pfizer Inc. (NYSE: PFE), BioNTech SE (NASDAQ: BNTX), and Moderna, Inc. (NASDAQ: MRNA) have jumped 13%, 220% and 720% respectively since they announced that their COVID-19 vaccines had passed clinical trials. The NASDAQ Biotechnology Index has grown by 30% since hitting a low in March 2020.
Even though the industry outlook for the vaccine makers is mostly positive, there is some reason to be cautious about careless investments. One of the potential disruptors to the growth of the pharmaceutical companies is the availability of the raw material. The chief of India-based Serum Institute, one of the largest vaccine producers in the world, last month spoke about the US restrictions on the export of raw materials needed for the COVID-19 vaccine. The restrictions had been put in place to help US-based companies get access to the material first.
Vaccine nationalism is a pressing issue that needs to be addressed before firms outside the United States are hurt by the impact of these export restrictions. Already, India has overtaken Brazil as the second-most COVID-affected country in the world, surpassing 14 million infections and more than 181,000 deaths. Vaccine raw material shortages could spell disaster for the nation and the firms producing it. The shifting priorities due to COVID-19 are also affecting investors as they seek to zero in on the financial implications of the pandemic.
The coronavirus crisis is shattering the entire globe, including the financial experts. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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With this context in mind, here is our list of 10 best vaccine stocks to buy now.
Best Vaccine Stocks to Buy Now
10. AbbVie Inc. (NYSE: ABBV)
Number of Hedge Fund Holders: 83
AbbVie Inc. (NYSE: ABBV) is a Chicago-based pharma giant that was founded in 2013. Since the founding, the firm has increased more than 184% in value. The company is well-known for producing Humira, an immunosuppressant that is used to treat arthritis. It is also marketing two new drugs in oncology and immunology. It makes Skyrizi as well, a drug to treat moderate to severe plaque psoriasis. AbbVie is one of the few stocks that have managed double-digit payout increases this year. It is placed tenth on our list of 10 best vaccine stocks to buy now.
The firm employs more than 20,000 people and the drugs it makes are sold in more than 170 countries around the world. Last month, news agency Reuters reported that AbbVie was putting a plan in place with the advice of investment bank Morgan Stanley for selling off a $5 billion portfolio of drugs it acquired last year. At the end of the fourth quarter of 2020, 83 hedge funds in the database of Insider Monkey held stakes worth $696 million in the firm, up from 82 in the preceding quarter worth $629 million.
9. Gilead Sciences, Inc. (NASDAQ: GILD)
Number of Hedge Fund Holders: 72
Gilead Sciences, Inc. (NASDAQ: GILD) is a California-based biopharmaceutical company that concentrates on the research and development of antiviral drugs used in the treatment of HIV, hepatitis B, hepatitis C, and influenza, including Harvoni and Sovaldi. The company operates in several countries around the world. It is famous for providing Biktarvy, Genvoya, Descovy, Odefsey, Eviplera, Stribild, and Atripla products for the treatment of human immunodeficiency virus (HIV) infection. Gilead is ninth on the list of 10 best vaccine stocks to buy now.
Gilead was founded in 1987. It is a member of the NASDAQ Biotechnology Index and the S&P 500. In June 2020, business news publication Bloomberg reported that a rival vaccine firm had approached Gilead about a potential merger rumored to be worth $240 billion. Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies held the most shares – 6.3 million – worth more than $371 million. Citadel Investment Group was 2nd with more than 5 million shares worth almost $297 million.
Nelson Roberts Investment Advisors, in their Q3 2020 investor letter, said that they were able to distinguish a value in Gilead Sciences, Inc. (NASDAQ: GILD) but sold their position in the company. Here is what Nelson Roberts Investment Advisors has to say about Gilead Sciences, Inc. in their Investor Letter:
“In the healthcare sector, we sold our position in Gilead (NASDAQ: GILD) as there are no near or medium-term growth drivers for the company. Its popular HIV drug, Truvada, is going off patent this year. Additionally, UnitedHealth Group said it would not cover Gilead’s other HIV drug, Descovy. Lastly, the multiple acquisitions that Gilead has made recently are not ready for prime time, and it will likely be two years or more before any of Gilead’s new drugs have a meaningful impact on revenue.”
8. CureVac N.V. (NASDAQ: CVAC)
Number of Hedge Fund Holders: 9
CureVac N.V. (NASDAQ: CVAC) is a Germany-based biopharmaceutical company that focuses on the development of therapies based on messenger RNA. The firm makes vaccines for infectious diseases and drugs to treat cancer and rare diseases. It is famous for the development of mRNA based novel therapeutic antibodies, prophylactic vaccines to prevent picornaviruses, influenza, malaria, and rotavirus, Lassa virus, and yellow fever. It was founded in 2000 and is placed eighth on our list of 10 best vaccine stocks to buy now.
The company has partnerships with several other biopharma firms for collaboration on research and development. It also has a program for a vaccine against the coronavirus. The vaccine is in the final stage of clinical development and the firm has entered into agreements with other pharma giants for the production of more than 300 million doses of the vaccine by the end of 2021. At the end of the fourth quarter of 2020, 9 hedge funds in the database of Insider Monkey held stakes worth $23 million in the firm, the same as in the preceding quarter worth $54 million.
7. Inovio Pharmaceuticals, Inc. (NASDAQ: INO)
Number of Hedge Fund Holders: 16
Inovio Pharmaceuticals, Inc. (NASDAQ: INO) is a Pennsylvania-based biopharma firm that concentrates on developing and selling synthetic DNA products for treating cancers and infectious diseases. The DNA products make use of special SynCon optimized plasmids to help break the tolerance of cancerous or infected cells in an immune system. It also facilitates cross-strain protection against unmatched and matched pathogen variants. Inovio Pharmaceuticals is placed seventh on our list of 10 best vaccine stocks to buy now.
On April 15, the shares of the firm were up 17% as the firm announced that it had developed a DNA COVID-19 vaccine that demonstrated an effective response against the original strain of the coronavirus as well as several other variants of the disease. The firm said that the drug had been effective against the UK, South Africa and Brazil COVID-19 variants. Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Coatue Management held the most shares – 5.3 million – worth more than $31 million.
Wasatch Advisors, in their Q3 2020 investor letter, said that they still believe in the capabilities of Inovio Pharmaceuticals, Inc. (NASDAQ: INO) although they trimmed their position in the company. Here is what Wasatch Advisors has to say about Inovio Pharmaceuticals, Inc. in their investor letter:
“Another large detractor was Inovio Pharmaceuticals, Inc. (INO), even though we had trimmed our position size when the stock price was higher. A biotechnology company, Inovio is developing a Covid-19 vaccine candidate, INO4800. Following an upswell of optimism from March through June, the company’s stock price headed lower during the third quarter amid worries that Inovio may be falling behind its competitors in the race to develop a vaccine for the disease. Concerns grew in late September after the company disclosed in a press release that the U.S. Food and Drug Administration (FDA) had placed a partial hold on a combined Phase 2/3 clinical trial of INO-4800 that Inovio had planned to initiate by the end of the month. According to the company, the FDA had additional questions, including about the vaccine-delivery device to be used in the study.
On the positive side, Inovio stated that the FDA’s partial hold didn’t result from any adverse events in its ongoing Phase 1 trial. Nor does the hold affect the advancement of the company’s other pipeline assets. Should INO-4800 eventually gain approval, we think its advantages—especially with respect to safety, storage and administration—would position it as a potentially valuable weapon in the vaccine arsenal that will be needed to quell the pandemic. Inovio’s DNA medicines currently in development for various cancers and pre-cancers also offer meaningful upside potential in our analysis.”
6. Novavax, Inc. (NASDAQ: NVAX)
Number of Hedge Fund Holders: 37
Novavax (NASDAQ: NVAX) is a drug company trying to develop nanoparticle vaccines and adjuvants. The firm has a market cap of close to $14 billion and annual revenue near $500 million. Novavax is especially known for using a recombinant vaccine technology to develop new products. The firm is seeking a cure for COVID-19, Ebola, seasonal influenza and many other infectious diseases. Last month, the firm announced that the vaccine it developed had a 96% efficacy against the coronavirus, making it one of the most highly effective vaccines.
This led to a 9% jump in the shares of the company. The data released by the firm indicated the Novavax vaccine was effective against new strains of the virus too, putting it ahead of other competitors in this regard. Last week, the British government announced that 10 million doses of the Novavax vaccine would be produced and packaged in England. At the end of the fourth quarter of 2020, 37 hedge funds in the database of Insider Monkey held stakes worth $1 billion in the firm, up from 36 in the preceding quarter worth $611 million.
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Disclosure: None. 10 Best Vaccine Stocks to Buy Now is originally published on Insider Monkey.
