10 Best Cancer Stocks to Buy According to Hedge Funds

6. Pfizer Inc. (NYSE:PFE)

Number of Hedge Fund Holders: 80

Pfizer Inc. (NYSE:PFE) is a global biopharmaceutical company that manufactures, develops, markets and sells biopharmaceutical products worldwide. It advances wellness, prevention, treatment, and cures in developing and emerging markets. The company’s goal is to become a world-class oncology leader. It is already the third-largest biopharma company in oncology in the United States and has plans to continue its progress in oncology for the rest of the decade.

It used a significant portion of its pandemic profits on the $43 billion acquisition of Seagen, a biotech company specializing in oncology. Pfizer Inc. (NYSE:PFE) has a strong focus on its oncology pipeline for future growth, with its 2030 goals entailing the addition of several new blockbuster drugs to its portfolio. The company is expected to continue looking for opportunities to acquire promising pharmaceutical companies to augment its pipeline further. This strategy is working well for Pfizer Inc. (NYSE:PFE) as management estimates earnings growth between 10% and 18% for 2025. Analysts also estimate the company’s earnings to grow by around 14% annually over the next 3-5 years.

Furthermore, Pfizer Inc. (NYSE:PFE) has an attractive dividend yield of 6.3%, higher than most blue-chip stocks. Its management has reiterated plans to support and raise this dividend periodically, recently announcing a 2.4% increase in early December. The company ranks sixth on our list of the 10 best cancer stocks to buy according to hedge funds.

Diamond Hill Select Strategy stated the following regarding Pfizer Inc. (NYSE:PFE) in its first quarter 2024 investor letter:

“Though valuations have increased, we continue identifying high-quality companies we believe the market is overlooking. Thus, we initiated new positions in Q1: Pfizer Inc. (NYSE:PFE). Biopharmaceutical company Pfizer is a leading global pharmaceuticals company that benefited during the pandemic from COVID vaccine and treatment sales, which provided significant excess earnings above the company’s normalized earnings power. Although the resulting influx of incremental cash allowed Pfizer to complete several acquisitions, the company has struggled to return to its pre-pandemic profitability as COVID-related sales have declined. In late 2023, Pfizer started focusing on cost-cutting and aiming to increase its operating margin significantly over the next few years. The base (non-COVID-related) business continues performing well, and given the outlook from here, we took advantage of what we consider an attractive, depressed valuation to initiate a position during the quarter.”