Novavax And Moderna Are Big Covid Vaccine Stock Bets This Year

Investors are betting the urgent need to end the Covid-19 pandemic, which has become the biggest healthcare and economic crisis of recent times, will translate into big profits for companies that successfully develop a safe, effective, and affordable vaccine. Our indicative theme of Coronavirus Vaccine stocks – which includes a diverse set of U.S. listed pharma and biotech companies that are working on novel Coronavirus vaccines – is up by over 700% year-to-date, on an equally weighted basis, compared to the S&P 500 which has gained just about 9% over the same period. The theme remains up by about 135% since the end of 2018, versus about 40% for the S&P. Novavax (NASDAQ: NVAX) has been the biggest driver of the theme’s returns, rising by over 2600% year-to-date. On the other side, Pfizer stock is down about 2% this year. Below is a bit more on the companies in our theme of Coronavirus Vaccine stocks and relative performance.

Novavax, a late-stage biotechnology company engaged in vaccine development has seen its stock surge by over 2,600% year to date, driven by its work on Covid-19 vaccines. The stock has returned about 200% since the end of 2018. The company’s vaccine candidate is currently in phase 2 trials.

Moderna, a clinical-stage biotech that is carrying out phase 3 trials of a Covid-19 vaccine, has seen its stock rally 245% this year. The stock has returned about 325% since 2018. (related: How much could a Covid-19 vaccine add to Moderna’s EPS?)

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Johnson & Johnson, the diversified pharma behemoth is working on a Covid-19 candidate, which began phase 1 trials in July. The stock is up by about 7% year-to-date and is up by about 24% since 2018. (related: Is Johnson & Johnson a better bet than Merck?)

Pfizer: the pharma major which is working with Germany’s BioNTech on a Covid-19 vaccine is down by -2% year-to-date. The stock is also down by about -8% since 2018. (related: Pfizer looks less expensive compared to Roche) Phase 3 testing for the vaccine began in the U.S. in July.

While vaccine stocks could offer further upside, there is considerable risk as well. What if instead, you are looking for a more balanced portfolio? Here’s a top-quality portfolio to outperform the market, with over 100% return since 2016, versus 55% for the S&P 500. Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk. It has outperformed the broader market year after year, consistently.

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