Along with the NASDAQ, vaccine stocks have wrenched back the stock market remote control as the pandemic worsens. Today, it was Pfizer (NYSE: PFE) who stole the spotlight. U.S health officials have agreed to pay $1.95 billion for 100 million doses of Pfizer and BioNTech coronavirus vaccine. The news is causing the bulls to charge ahead.
Table of contents 1. Pfizer and BioNTech vaccine order 2. PFE's vaccine developments so far. 3. Does YIG see value in a Pfizer investment?
U.S. officials order 100 million doses of Pfizer’s vaccine
In short, the government cannot wait until next year for a viable vaccine. Hence, the U.S. government is ordering experimental doses from COVID-19 biotechs, such as Astra Zeneca and Pfizer, to potentially save people’s lives. The U.S. government can acquire another 500 million Pfizer doses on top of the existing 100 million. Today’s announcement signifies government backing and an opportunity for Pfizer to show the world that their vaccine can successfully fight the virus. It is this opportunity that is causing the bulls to rally in pre-market trading.
Pfizer/BioNtech vaccine developments timeline
Does YIG see value in a Pfizer investment?
Before I begin, I am obliged to remind our viewers that this is not financial advice rather investment commentary on my extensive research
Short answer: YIG does see value, but investing solely off vaccine news might not the smartest investment strategy.
Trading off Pfizer vaccine news can be dangerous
Many investors are trading Pfizer, and other vaccine companies, on a news-based approach. Do not get me wrong today’s announcement is a big win for Pfizer investors. In which we should Pfizer’s moving average and resistance levels climb higher (opinion not advice)
However, YIG would like to point out that news-based trading can be incredibly dangerous. First, greed is alive when trading off positive news. Greed will infiltrate your brain and convince you that this COVID-19 announcement will send the stock to the moon. Ultimately, causing you not to put a profit target. Consequently, you watch the stock soar and watch the stock plummet, in which you are forced into a long-term hold or taking a loss.
Second, good COVID-19 news does not always equate to astronomical gains. The sell-offs from Inovio and Astra Zeneca expose how a positive announcement can cause investors to take profits. Because investors want to sell when the stock is high, which is usually when the company releases news. Thirdly, institutions hold more capital than everyday investors. Despite everyday investors riding the news hype if the institutions decide to sell, which is usually off news, then your hope of unrealistic gains disappears.
Overall, Pfizer is a roboust COVID-19 frontrunner with an impressive clinical wallet and vaccine candidate. Today’s announcement is a positive for the Pfizer story, but should not be the sole reason you invest. Understanding the bigger picture, being fundamentals, technical, the news, and other potential vaccines will ensure you stay in the COVID-19 game longer.
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The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
Written by Patrick McLoughlin, and Tyger Fitzpatrick, Senior manager, and Founder of YIG.