By MarketBeat. Originally published at ValueWalk.
Brilliant Biotech Plays to Consider Adding Now
While the idea of adding exposure to one of the most volatile sectors of the market during a correction might not sound great on paper, the truth is that investors should view the biotech sector as a sleeping giant that could be ready to wake up in the coming weeks. Many of the strongest biotech companies can make for great core holdings in your portfolio thanks to a combination of strong drugs that generate stable cash flows and high upside novel drugs in development that have the potential to become huge winners.
Q4 2021 hedge fund letters, conferences and more
The sector as a whole has been very weak over the last few quarters, but there are absolutely some pockets of strength in biotech that stand out at this time. Keep in mind that an investment in biotech stocks can not only lead to long-term gains but also help to improve the quality of healthcare around the world, making it a great area of the market to explore.
There’s definitely a chance that we start to see some signs of life from top biotech stocks this month, which is why we’ve put together a list of the 3 best biotech stocks to buy in March below.
Regeneron Pharmaceuticals (NASDAQ:REGN)
If you’re interested in a biotech stock that looks primed for a move higher in March, Regeneron fits the bill. It’s a biopharmaceutical company that is focused on developing treatments for eye diseases, dermatitis, cancer, and rheumatoid arthritis. With several leading drugs like Eyelea along with plenty of exciting candidates in the company’s pipeline, this is a quality name in the biotech sector with a great-looking chart. Shares of Regeneron are trading at a bargain valuation at this time, with a P/E ratio of 8.59, and the stock has been outperforming the S&P 500 thus far in 2022.
Regeneron reported Q4 revenues of $4.95 billion, up 104% year-over-year, thanks to strong sales from the company’s REGEN-COV COVID-19 antibody cocktail. While this drug should only provide a temporary boost to the company’s earnings, the company is moving forward with other antibody cocktails for infectious diseases that could also result in improved profits. With over 30 product candidates in clinical development, recent FDA approval for drugs like Dupixent, and plenty of relative strength, Regeneron is absolutely a biotech stock worth watching this month.
Vertex Pharmaceuticals (NASDAQ:VRTX)
Anytime a biotech company has specific treatments or therapies that competitors will have a hard time replicating, it’s a stock worth looking at. That’s exactly the case with Vertex Pharmaceuticals, as the company has developed a dominant position in treating cystic fibrosis. With CF drugs like Kalydeco, Symdeko, Orkambi, and Trikafta, Vertex’s products are making a profoundly positive impact on patients’ lives around the world. Vertex’s blockbuster drug Trikafta, which is a triple-combination CF regiment that received approval back in 2019, has helped the company to deliver impressive top-line growth over the last few quarters.
The company’s management team estimates that it could treat up to 90% of all CF patients if it receives additional approval for expanded indications with its drugs, which is a great reflection of how helpful its treatments are. Given that the company’s patent protections extend as far as 2037, Vertex is in a fantastic position to dominate the CF marketplace for years to come. Finally, this biotech company is worth a look thanks to a diverse pipeline of gene-editing therapies to treat diseases like sickle cell disease. The stock is currently trading above all of the major short-term moving averages and is up over 10% year-to-date, which tells us it’s one of the stronger stocks in the market at this time.
Pfizer (NYSE:PFE)
While its hard to imagine Pfizer repeating its near parabolic ascent from 2021, adding shares of this blue-chip biotech while its trading around the 200-day moving average could be a great long-term move. It’s one of the world’s largest biopharmaceutical companies with one of the most diverse drug portfolios out of any company, which means it’s a company with plenty of resources to support dividends along with spending for research & development. Pfizer’s top-selling drugs include the Prevnar family of vaccines, Eliquis for stroke and embolism, and Ibrance for breast cancer.
The company has been receiving billions in revenue from its COVID-19 vaccine, which in turn should help to fuel the growth of other areas of the business. In addition to the vaccines, Pfizer’s Paxlovid oral medication was found to be 89% effective at preventing hospitalization among people with a risk of developing serious illness from COVID-19 and could be another winner for the company. The stock is trading at an attractive 6.52 forward P/E ratio and offers investors a 3.33% dividend yield, which makes this almost too good of an opportunity to pass up in the biotech sector.
Should you invest $1,000 in Pfizer right now?
Before you consider Pfizer, you’ll want to hear this.
MarketBeat keeps track of Wall Street’s top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on… and Pfizer wasn’t on the list.
While Pfizer currently has a “Buy” rating among analysts, top-rated analysts believe these five stocks are better buys.
Article by Sean Sechler, MarketBeat
Updated on
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