We recently compiled a list of the 7 Best Stocks to Buy for Long Term. In this article, we are going to take a look at where Pfizer Inc. (NYSE:PFE) stands against the other stocks.
Market Strategist Says The Economy May Re-Accelerate on its Own
On September 23, Chris Watling, Longview Economics founder, CEO, and chief market strategist, appeared in an interview on Yahoo Finance to discuss the rate easing path and the impact it may have on the market.
According to Walting, the market is deeply divided on not two but three different sides. While some analysts and investors foresee a recession, others believe the economy is going towards a soft landing, and of those a small minority believe that the economy may accelerate at a rapid pace. Walting also added that while predicting the appropriate terminal rate is interesting, there is a lot more going on with the economy. Comparing economic conditions to the 2008 recession, households and corporations are in much better shape, hinting that a recession may not be the most likely outcome.
He believes that the economy may be slowing right now but it may experience faster reacceleration than before without the need for further falls. His advice to investors is to judge the economy based on multiple data points. As for the appropriate portfolio, Walting suggests that bonds are overcooked and gold must be given a pause. At the moment, the market is rotating away from tech into defensive sectors, and in the future, it may rotate more towards cyclical stocks.
The Fed is Thinking About Growth
As the S&P 500 recorded an upside following the Fed’s easing cycle, investors and analysts alike eye a soft landing for the economy. On September 26, Liz Miller, Summit Place Financial Advisors founder and president, appeared in an interview on Yahoo Finance to discuss the future of markets.
Miller states that the pivot has been great for the financial markets and now that the Fed is thinking about growth, investors are hopeful of a soft landing. She suggests that stocks in sectors such as housing, rental, finance, and consumer goods may benefit immensely from the easing interest rate cycle.
Miller suggests that the S&P 500 is not the best way to measure the performance of financial markets, given that it is skewed to the mega-cap tech stocks. Looking at other indices, other sectors have not made highs since December 2021. She believes the market may be flat but there is huge potential for upsides. Miller shares concerns over the Chinese economy and how it influences the global outlook. She suggests that for the global economy to balance, companies must work to regain consumer confidence in China.
Now that we have studied the appropriate portfolio mix for investors following the Fed’s decision, let’s take a look at the 7 best stocks to buy for the long term.
Our Methodology
To come up with the 7 best stocks to buy for the long term we examined promising stocks hedge funds are piling into. These are blue chip stocks with wide moats and have long track records of driving shareholder returns. We have ranked the stocks in ascending order of the number of hedge funds that have stakes in them, as of Q2 2024.
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)
Number of Hedge Fund Holders: 84
Pfizer Inc. (NYSE:PFE) is one of the best stocks to buy for the long-term and we say that because at the end of Q2 2024, 84 hedge funds were bullish on PFE with total stakes amounting to $3.62 billion. Pfizer Inc. (NYSE:PFE) is a leading pharmaceutical and biotechnology company based in New York, United States.
Previously in March, the company acquired Seagen, a biotechnology firm, for $43 billion. The acquisition is projected to deliver more than $10 billion in revenues by 2030. In August, Pfizer and its biotechnology partner were approved by the FDA to roll out their new shots before the flu season commences.
On the operational front, the company is undergoing a Manufacturing Optimizing Program focused on enhancing efficiency that will deliver $1.5 billion in savings by the end of 2027. The company is notorious for putting customers first. Towards the end of August, Pfizer Inc. (NYSE:PFE) launched PfizerForAll, an online platform to make access to healthcare easier.
Overall, Pfizer Inc. (NYSE:PFE) is not just a biotechnology leader. The company is also capitalizing on improving its operations and improving access to healthcare, making it one of the best stocks to buy for the long term. During the second quarter of 2024, the company logged $13.3 billion in revenue, representing operational revenue growth of 3%.
Parnassus Investments’ 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 6th on our list of the best stocks to buy for long term. While we acknowledge the potential of PFE as an investment, 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 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.