We recently published a list of 10 Most Buzzing Stocks To Buy Now. In this article, we are going to take a look at where Pfizer Inc. (NYSE:PFE) stands against the other buzzing stocks.
Stock Market Volatility
September and October tend to be the most volatile months for the stock market, particularly during election years. This was recently discussed by Sam Stovall, the chief investment strategist at CFRA Research, who expects the volatility to stay until the end of October.
Stovall says that while the S&P 500 recovered all its 2022 bear market losses by January this year, and reached 22 new all-time highs by March, equities have digested some of these gains and experienced sector rotation away from 2023 high flyers into more defensive areas of the market. Hence, the year started great, but the markets are declining once again. The S&P 500’s average volatility in October 2023 was 35% higher than the average for the remaining 11 months of the year.
Investors are concerned that the Fed will be slower to lower interest rates while inflation remains sticky and GDP growth begins to cool. Stovall expects three 25-basis point cuts this year, followed by another four in 2025. He thinks that while a 50 basis point cut is rare since it only ever happened twice, in 2001 and then 2007, it is still not unlikely given that the economy is worse than expected.
According to Stovall, investors need to be prepared for this increased volatility as the market digests the Fed’s actions and the potential impact on the economy. The market will likely remain uncertain until the Fed can find the right balance between slowing down the economy and stopping inflation, without causing a recession.
Tom Lee, Fundstrat Global Advisors managing partner and head of research, is of a similar idea, suggesting that investors should remain cautious over the next 8 weeks, due to both uncertainty surrounding elections and the September cuts. He says that the stock market may experience a 7-10% pullback, considering there have already been two 7% corrections this year.
Lee thinks at least a 5% pullback can be anticipated, but if it’s only 1-2%, then that’s negligible. But despite the recommended caution for the 8 weeks starting September, he thinks the volatility does not translate into a tough full-year. He views this pullback as a buying opportunity, believing that the market has not yet reached its peak for 2024.
As Lee encourages investors to be ready to buy the dip, we are here with a list of the most buzzing stocks to buy now.
Note: All price/volume data is as of September 6.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A medical technician wearing protective gloves and a mask mixing a biopharmaceutical solution.
Pfizer Inc. (NYSE:PFE)
Volume: 23.383 million
Average Volume (3-Month): 32.17 million
Number of Hedge Fund Holders: 84
Pfizer Inc. (NYSE:PFE) is a pharmaceutical and biotech company, greatly known for its success with the coronavirus vaccine, Comirnaty. In 2022, the vaccine helped generate over $100 billion in revenue, the highest in the company’s history. But the demand for the vaccine hasn’t materialized after the pandemic years.
Comirnaty sales in the second quarter of 2024 were only $195 million, a sharp 87% decline from the previous year, with no signs of a rebound expected. Pfizer Inc. (NYSE:PFE) still has strong potential for success as its patent-protected drugs give it strong pricing power.
In the second quarter of 2024, the company reported $13.28 billion in revenue, a 4.31% year-over-year improvement. There was also a 14% rise in operational revenue from non-COVID products.
It currently markets 3 oncology therapies: Ibrance for breast cancer, Xtandi for prostate cancer, and Inlyta for kidney cancer. These along with others contribute significantly to the annual sales. What sets Pfizer apart in the oncology field is its commitment to innovation and strategic acquisitions.
In March, it acquired Seagen for $43 billion, a biotechnology firm specializing in antibody-drug conjugates (ADCs). This alone will help contribute over $10 billion in risk-adjusted revenues by 2030.
In August, the FDA allowed Moderna Inc., Pfizer Inc. (NYSE:PFE), and its partner BioNTech SE (NASDAQ:BNTX) to roll out their new shots over the coming days, both of which plan to offshoot Omicron known as the KP. Therefore, before respiratory illness season arrives this fall, there will be new COVID-19 shots.
84 hedge funds are long in the company so it is popular among elite money managers. Citadel Investment Group was the company’s leading stakeholder as of June 30, with a position of $827,944,988.
Parnassus Value Equity Fund stated the following regarding Pfizer Inc. (NYSE:PFE) in its first quarter 2024 investor letter:
“During the quarter, we added new positions in Pfizer Inc. (NYSE:PFE), NICE and Charter Communications. We purchased Pfizer to capture the potential upside from any turnaround following the COVID-induced boom-bust cycle of the last few years. Pfizer’s stock price sank by more than 40% in 2023 as COVID-19 vaccine revenues rolled off, providing an attractive entry point for us. The company completed its acquisition of Seagen, which should strengthen Pfizer’s pipeline in antibody-drug conjugates (ADC). Pfizer also offers an attractive dividend yield.”
Overall PFE ranks 7th on our list the most buzzing stocks to buy. While we acknowledge the growth potential of PFE as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PFE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
