In this article we will take a look at the 10 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.
5. BioNTech SE (NASDAQ: BNTX)
Number of Hedge Fund Holders: 17
BioNTech SE (NASDAQ: BNTX) is a Germany-based biotechnology firm that makes active immunotherapies for patient-specific approaches to the treatment of several diseases, including cancer. The firm is developing drugs for advanced melanoma, prostate cancer, head and neck cancers, triple negative breast cancer, ovarian cancer, and lung cancer. It also makes drugs for treating solid tumors. The company was founded in 2008 and is placed fifth on our list of 10 best vaccine stocks to buy now.
BioNTech has collaborations with Genentech, Sanofi, Shanghai Fosun Pharmaceutical, and Regeneron Pharmaceuticals. On April 18, the company announced that it would provide 100 million more doses of the COVID-19 vaccine it had developed to the European Union. Out of the hedge funds being tracked by Insider Monkey, San Francisco-based investment firm Redmile Group held the most shares – 580,746 – worth more than $47 million. Ikarian Capital was 2nd with more than 319,900 shares worth almost $26 million.
4. AstraZeneca PLC (NASDAQ: AZN)
Number of Hedge Fund Holders: 41
AstraZeneca PLC (NASDAQ: AZN) is a United Kingdom-based multinational biopharma firm that makes medicines for ailments related to oncology, cardiovascular, renal and metabolism, respiratory, infection, neuroscience, and gastroenterology. The products made by the firm are sold worldwide and it uses distributors and local representatives for marketing purposes. It was founded in 1992 as Zeneca Group PLC but changed the name to AstraZeneca in 1999. The firm is placed fourth on our list of 10 best vaccine stocks to buy now.
The company has a collaboration agreement with the Massachusetts General Hospital for the provision of digital health solutions. It also partners with Sanguina for a smartphone application focused on hemoglobin management in patients with anemia of chronic kidney disease. At the end of the fourth quarter of 2020, 41 hedge funds in the database of Insider Monkey held stakes worth $298 million in the firm, up from 33 in the preceding quarter worth $225 million.
In their Q4 2020 investor letter, Baron Health Care Fund highlighted a few stocks and AstraZeneca Plc (NASDAQ:AZN) is one of them. Here is what Baron Health Care Fund said:
“AstraZeneca PLC is a multinational pharmaceutical company developing drugs across multiple therapeutic areas such as oncology and respiratory diseases. Shares were impacted by news of AstraZeneca’s joint development with Oxford University of a viral-based COVID-19 vaccine. Given a mixed data set due to an unforeseen error in dosing that occurred in the Brazilian market, the vaccine timelines slipped, hurting share performance. Our investment thesis on AstraZeneca is not dependent on COVID-19 but rather its best-in-class large-cap growth profile, and we retain conviction.”
3. Pfizer Inc. (NYSE: PFE)
Number of Hedge Fund Holders: 63
Pfizer Inc. (NYSE: PFE) is a US-based drug giant. Pfizer was one of the first companies to publicly market the coronavirus vaccine and the company has since partnered with many country governments for the supply of the vaccine. The company has a market cap of well over $200 billion and an annual revenue that exceeds $40 billion. The company’s shares are set to rise further as the US government ramps up vaccine production with the aim of vaccinating all adult US population. According to news media reports, the US is administering more than 3 million vaccine doses daily.
Since vaccinating children is one of the foremost challenges in order to get life back to normal across the world, the company has released a study detailing that the vaccine it produces is highly effective for children aged between 12 and 14 years. The study is short in scope, and British firm AstraZeneca has promised a large clinical trial for its vaccine which will begin soon. Past vaccine trials have tended to concentrate on older patients since that age group was the most vulnerable to the coronavirus.
2. Moderna, Inc. (NASDAQ: MRNA)
Number of Hedge Fund Holders: 41
Moderna, Inc. (NASDAQ: MRNA) is a Massachusetts-based pharmaceutical firm that mainly develops drugs and vaccines based on messenger RNA. It is one of the firms that have developed a vaccine for the coronavirus pandemic and struck a deal with several countries for its production and supply. The firm has a market cap of more than $59 billion and posted more than $800 million in annual revenue in October 2020 that is expected to increase to more than $17 billion this year. Moderna is placed second on the list of 10 best vaccine stocks to buy now.
On April 15, equity research firm Oppenheimer gave Moderna a price target of $206 and reiterated an Outperform rating on company stock. Hartaj Singh, an analyst at Oppenheimer, said Moderna fared better than competitors because of efficient production of the vaccine. Out of the hedge funds being tracked by Insider Monkey, London-based investment firm Theleme Partners held the most shares – 5.3 million – worth more than $558 million. DE Shaw was 2nd with more than 3 million shares worth almost $325 million.
In their Q4 2020 investor letter, Baron Health Care Fund highlighted a few stocks and Moderna Inc. (NASDAQ:MRNA) is one of them. Here is what Baron Health Care Fund said:
“Moderna, Inc. is a leader in the emerging field of mRNA-based vaccines and therapeutics. Shares pulled back from highs on likely profit taking, but we are looking past short-term fluctuations to focus on long-term potential. The pandemic has been a strong proof point of Moderna’s platform, with a COVID-19 vaccine coming to market in less than a year versus traditional vaccines that can take a decade. With this success under its belt, we think Moderna has potential to disrupt the entire biopharma space, from infectious disease vaccines to oncology and rare disease treatment.”
1. Johnson & Johnson (NYSE: JNJ)
Number of Hedge Fund Holders: 81
Johnson & Johnson (NYSE: JNJ) is a New Jersey-based multinational firm that makes medical devices, pharmaceuticals, and consumer packaged goods. It was founded in 1886 and is placed first on our list of 10 best vaccine stocks to buy now. The company makes baby care products, skin care products, and medicines for ailments such as allergies and flu. It also has a healthcare line specifically for women. The pharma section of the firm offers products in immunology, infectious diseases, neuroscience, oncology, pulmonary hypertension, and other diseases.
The New Jersey firm also has stakes in neurovascular care products to treat hemorrhagic and ischemic stroke; orthopedics products in support of hips, knees, trauma, spine, sports, and other; advanced and general surgery solutions. The COVID-19 vaccine the firm has developed is one of the most effective ones in the world. At the end of the fourth quarter of 2020, 81 hedge funds in the database of Insider Monkey held stakes worth $5.8 billion in the firm, down from 82 in the preceding quarter worth $4.8 billion.
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Disclosure: None. 10 Best Vaccine Stocks to Buy Now is originally published on Insider Monkey.
