Covid-19, PFE & MRK

Investment Analysis Clubs Macro Economic Trends and Risks
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I own Pfizer and Merck, which are old-style Big Pharma companies. Both have very high “Starmine” stock analyst scores, are highly stable dividend-yielders with unusually low P/E ratios and long-term bullish sentiment.

https://www.google.com/search?client=firefox-b-1-d&q=pfe…
https://www.google.com/search?client=firefox-b-1-d&q=mrk…

https://www.covid19oralrx-patient.com/?source=google&HBX…

https://www.merck.com/news/merck-and-ridgebacks-molnupiravir…

Pfizer is well-known as the producer of one of the mRNA vaccines for Covid-19. Both Pfizer and Merck have recently received Emergency Use Authorization for oral drugs for the Treatment of High-Risk Adults With Mild to Moderate COVID-19.

Both MRK and PFE are currently in a price down trend. I think that this is because of the downtrend in Covid-19 cases.
https://www.nytimes.com/interactive/2021/us/covid-cases.html…

Dr. Anthony Fauci, the top White House medical adviser, says that the coronavirus pandemic won’t end with the elimination of the virus. Instead, he says that a less dangerous and disruptive strain of the virus will likely take hold and become endemic. Stating that an infection will become endemic says nothing about how long it might take to reach stasis, what the case rates, morbidity levels or death rates will be or, crucially, how much of a population — and which sectors — will be susceptible. Nor does it suggest guaranteed stability: there can still be disruptive waves from endemic infections.

https://www.npr.org/sections/coronavirus-live-updates/2022/0…

https://www.nature.com/articles/d41586-022-00155-x

I think that the U.S. population is about as vaccinated as it is going to be. I think that the hold outs aren’t going to rush in to be vaccinated any time soon. About 20% of the U.S. population over age 5 have not received any vaccine. And even those who have been fully vaccinated & boosted will have waning immunity within about 4 months.
https://www.sciencedaily.com/releases/2022/02/220211161300.h…

In both 2020 and 2021, Covid-19 had a major winter spike and then a minor (but substantial) summer spike after the Memorial Day and 4th of July super-spreader events. I’m sure that 2022 will follow the same pattern.

It’s hard to say how many pro-vaccine people will get another booster shot when they know there are effective medicines available if they do catch Covid.

I think that the price of PFE and MRK will continue to drop for a while as the incidence of Covid drops. But they will continue to pay their dividends, as usual. I expect the price to turn around and start rising when the next wave of Covid starts in the summer.

Wendy

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It’s hard to say how many pro-vaccine people will get another booster shot when they know there are effective medicines available if they do catch Covid.

I would rather not get the plague in the first place, than need to be cured of it.

Actor Martin Milner caught polio in 46. Recovered in a year and was able to chase perps on “Adam-12”, but I would rather be vaccinated.

Steve…remembers when everyone knew what an iron lung was.

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Another Covid vaccine stock is Moderna.

As I posted on the Pandemic board today:
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[pauleckler wrote:] Moderna is turning a profit and has dozens of new vaccines in various stages of development, but Wall Street seems them as a one trick pony. When Covid is under control vaccine sales could plummet and hence stock price is trending down.

I bought some for family in recent days at $140, $141 and $151. Current price of $146, PE is ~9. Upcoming earnings release, before market open on 2/24, is expected to give us trailing twelve month earnings to drop PE to 5.4, with similar level earnings expected next year as Covid continues to be a widespread problem and Moderna offers the ‘best’ vaccine/booster. That means the company is expected to earn ~1/3 of its market cap in these two years.

I think the possibilities for Covid vaccine becoming an annual shot indefinitely, and for them to develop other successful vaccines and drugs using their technology make the stock an excellent bet at these prices.

Could always be wrong … do your own due diligence.
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Moderna doesn’t pay any dividend and it’s a young company with the Covid vaccine its only current money maker, so there’s a lot more risk here than with Pfizer, but with such promising technology and incredible amounts of money coming in now to finance further products, I like the risk/reward.

An Omicron sub-variant, BA.2, is becoming widespread and there’s evidence that it not only spreads faster than Omicron, but it may be more virulent. In the following article one doctor says it should get its own greek letter as a variant of interest.

https://www.cnn.com/2022/02/17/health/ba-2-covid-severity/in…

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