Summary: ON SALE
Score: 11/20
MOS: 62%
Share Price: $40
Sticker Price: $107
Pfizer is an American multinational pharmaceutical corporation founded in 1849 and based out of New York, NY. They are one of the world’s largest pharmaceutical companies, ranked 57 on the 2018 Fortune 500 list of the largest United States corporations by total revenue.
Big news came in this week. Pfizer and BioNTech worked together to develop a COVID-19 vaccine (BNT162b2). They ran a phase 3 trial involving 43,538 participants with 94 confirmed cases of COVID-19 and the vaccine was 90% effective in preventing a viral infection 28 days after initiating the two-dose schedule. The two companies are waiting until the third week of November for safety data before requesting an emergency authorization from the US Food and Drug Administration (FDA).
What happened to the stock over the last few days?
On Monday 11/9 the stock started trading at $36.
On Tuesday 11/10 the stock went to $41 (+15%)
By the end of day Tuesday 11/10, the stock was already back down to $38 (-7%)
What happened? We should have seen this stock take off like a rocket!
Pfizer CEO Albert Bourla sold $5.6 million worth of stock the same day of the 90% success rate. This is not a good sign.
I did extensive research on WHY he sold those shares and I couldn’t find a definitive reason. I did however find the sale of his shares were part of a “predetermined plan” he established in August of this year. Interesting coincidence the sale of the shares occurred on the same day of the announcements. I don’t like it. As quoted by Daniel Craig’s character in the movie Knives Out “Something is afoot.” In other words, something is going on behind the scenes that we don’t know about.
I personally do not invest in Pharma stocks because of two main reasons…
1. Government regulations can change rapidly, causing pharma stocks to radically rise and fall, regardless of the financial performance of the company. In other words, the company can have strong sales, profits, and low debt but a regulation can cause the stock to drop overnight. If you’re an avid investor in pharma stocks, this can be a depressing journey.
2. Pharma stocks can be politically charged. Pfizer has been known historically to side more with the republican party and even mentioning what party you side with can create a lot of enemy’s. It’s best to keep politics out of business.
I did a little homework on other pharma companies to see how Tykr ranks them.
Johnson & Johnson
Summary: OVERPRICED
Score: 5/20
MOS: 0%
Share Price: $147
Sticker Price: $39
Abbott Laboratories
Summary: OVERPRICED
Score: 9/20
MOS: 0%
Share Price: $109
Sticker Price: $11
If you’re looking for a pharma stock to diversify your portfolio, Pfizer may be an option but I advise you to keep this on your watchlist for now.
With a score of 11/20, the financials are looking pretty good. With a MOS of 62% (Share Price of $40 vs Sticker Price of $107) this stock has some upside potential. The big red flag is the CEO share sell off. What does he know that we don’t?