In this article, we will discuss some of the popular stocks trending this week. To take a look at some more stocks that are making headlines, go to 10 Trending Stocks This Week.
5. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 79
Pfizer Inc. (NYSE:PFE) has gained 0.3% this week after the New York-based pharmaceutical giant announced the acquisition of Global Blood Therapeutics, Inc. (NASDAQ:GBT) for $5.4 billion or $68.50 per share.
Pfizer Inc. (NYSE:PFE) has made this move to boost its drug pipeline as it anticipates a potential slowdown in demand for COVID-19 vaccines and other medications following a decline in the number of Covid-19 cases globally. Global Blood is a blood disorder drugmaker, having Oxbryta in its portfolio. The drug was approved by the FDA in 2019 for the treatment of sickle cell disease in patients aged 12 or older.
ClearBridge Investments shared its stance on Pfizer Inc. (NYSE:PFE) in its Q4 2021 investor letter. Here’s what the investment management firm 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.
Pzena Investment Management was the leading hedge fund investor in Pfizer Inc. (NYSE:PFE) as of Q2 2022.
