We recently published a list of the 10 Stocks to Buy and Sell Before the Third Quarter 2024 According to Jim Cramer. Since Novavax Inc (NASDAQ:NVAX) ranks 10th on the list, it deserves a deeper look.
Jim Cramer in a latest program discussed the changing consumer trends in the US, wondering whether the consumer is just “fed up” of paying high prices and becoming “frugal.” Cramer said this “frugal thesis” is not “obvious” but he has recognized this latest trend based on some new developments. Cramer named a few consumer companies that are benefitting from the changing consumer behavior because of their discounted price offerings. Cramer rejected the notion that dollar stores are cheap. He said these stores raise prices “aggressively” and calling them dollar stores has become a “misnomer.” The CNBC host said the consumers “want prices lower” and that’s why dollar store companies are getting crushed in the new environment.
Jim Cramer also said the “renting society” is winning the “owning society,” pointing to a new trend where consumers are renting boats instead of buying them to enjoy the experience without spending a fortune.
For this article we watched several latest programs of Jim Cramer aired on CNBC and picked some stocks he’s recommending investors to buy or sell. With each stock we have mentioned the number of hedge fund investors. 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).
Novavax Inc (NASDAQ:NVAX)
Number of Hedge Fund Investors: 14
Jim Cramer is bearish on Novavax Inc (NASDAQ:NVAX). He thinks COVID was a “very lucky break” for biotech companies like Novavax Inc (NASDAQ:NVAX).
“But it’s not going to get me into that stock. It lost too much money for people.”
The struggling Novavax Inc (NASDAQ:NVAX) last month got relief after French drugmaker Sanofi entered a deal with NVAX that will help co-commercialize its COVID-19 jab Nuvaxovid and develop combination vaccines. Novavax Inc (NASDAQ:NVAX) will receive up to $1.2 billion in cash from the deal. There would be an upfront payment of $500 million and another $700 million in potential development and launch milestones.
The company talked in detail about the deal in a latest earnings call:
And we expect our royalties and milestones from Sanofi’s efforts with Nuvaxovid to exceed the value of what our own efforts might have yielded, if we had kept the product ourselves exclusively. By licensing Sanofi to use our Nuvaxovid to develop their own combination Flu and COVID products, and to use Matrix-M as a component of other vaccines across their portfolio. We expect to realize substantial additional royalties and milestones valued potentially in the billions of dollars, driven by Sanofi’s product development and commercialization efforts over the years and decades to come. The royalties and milestones associated with potential new vaccines, Sanofi may develop using Matrix-M as well as those royalties and milestones anticipated from sales of our COVID-19 vaccine and the development of Sanofi’s combination flu COVID and other potential combination vaccines, should help us to sustain cash flow as we invest in our own R&D in an efficient and thoughtful manner for years to come.
During the first quarter, the company was able to narrow its loss by 50% year over year and increase revenue by 16%
While Novavax Inc (NASDAQ:NVAX) has secured a lifeline to sell its vaccines, its royalty sales will decline enormously. With too much hinging on Sanofi and lack of diverse growth catalysts, NVAX bears believe the stock is not a long-term play in the biotech space.
Overall, Novavax Inc (NASDAQ:NVAX) ranks 10th on Insider Monkey’s list titled 10 Stocks to Buy and Sell Before the Third Quarter 2024 According to Jim Cramer. While we acknowledge the potential of Novavax Inc (NASDAQ:NVAX), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Novavax Inc (NASDAQ:NVAX) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
