3. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 79
Pfizer Inc. (NYSE:PFE) is a biopharmaceutical firm based in New York, and is behind the popular Comirnaty Pfizer-BioNtech Covid-19 vaccine used all around the world. Sales of the vaccine generated $36 billion in revenue during 2021, and in March the US Food & Drug Administration Authority (FDA) approved the second booster dose of Pfizer’s Covid vaccine.
In early June, The Wall Street Journal reported that Pfizer Inc.’s (NYSE:PFE) COVID-19 pill, Paxlovid, has become the leading Covid pill in the United States, as improved supplies ensured widespread availability. Trials have showed that Pfizer’s pill is 88% effective at preventing hospitalization, as compared to the 30% efficacy rate by the rival Molnupiravir drug from Merck (NYSE:MRK) and Ridgeback Biotherapeutics. On May 4, Wells Fargo analyst Mohit Bansal maintained an ‘Overweight’ rating on Pfizer Inc. (NYSE:PFE) shares and revised the price target to $55 from $60.
Pfizer Inc. (NYSE:PFE) posted earnings per share of $1.62 for the first quarter, beating estimates by $0.05. The revenue of $25.66 billion for the quarter also outperformed estimates by $927.1 million, and grew 76% in comparison to the year-ago quarter.
As of the end of the first quarter, 79 hedge funds owned positions in Pfizer Inc. (NYSE:PFE) shares, with a combined value of $4.1 billion. This is in contrast to 83 hedge funds a quarter ago. With 10.7 million shares priced at $554.1 million, AQR Capital Management was the top shareholder of Pfizer Inc. (NYSE:PFE) in the first quarter of 2022.
ClearBridge Investments, an asset management firm, talked about the prospects of Pfizer Inc. (NYSE:PFE) in its Q4 2021 investor letter. Here’s what the fund said:
“While the level of general turnover abated as we progressed through 2021, it remained high in one area: post-COVID-19 recovery plays. The concept behind this investment thesis was, and still is, straightforward: with the advent of effective vaccines, the path from pandemic to endemic is just a matter of time. As this transition occurs, the estimated excess savings of over $2 trillion built up on U.S. consumer balance sheets will unlock dramatic pent-up demand for experiences, especially global travel. This investment case seemed especially compelling when the Pfizer vaccine positively surprised markets in November 2020. As a result, we made post-COVID-19 stocks (which were trading well below our estimate of recovery value) a sizable theme within the portfolio. We understood this to be a more aggressive tilt in positioning because it required a major improvement in demand to catalyze fundamentals and drive price toward higher business values. While we accepted that recovery would not be smooth and that it would take time to deploy vaccines both domestically and globally, we decided that recovery was the logical path of least resistance and we were being well compensated for these risks.
What we did not account for, however, was vaccine hesitancy and the risk of further infection waves. As a result, the first variant wave, Delta, was a negative surprise to both the market and our team. When the risk surfaced, we immediately updated our probability-driven models and debated how we should react. The resulting conclusion was that the recovery would be delayed and that we should reduce our exposure quickly, subsequently targeting the most aggressive recovery stocks such as cruise lines. We again acted swiftly and decisively to the positive surprise that Pfizer had delivered a high-efficacy antiviral COVID-19 pill. This pill should greatly reduce COVID-19 severity risks globally, increasing the probability of a global travel recovery in 2022. While this is still true, the emergence of the highly mutated Omicron variant set off another infection wave which spurred us to again act quickly and further reduce our risk exposure. This back-and-forth may sound exhausting, but it highlights our compulsion to act if we determine a surprise has a large enough impact on the probabilities that power our valuation-driven investment cases.
