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Pfizer VS Moderna Covid-19 Vaccine Race: Who will win in the Market?

Pfizer an Moderna: A Race for a Vaccine

If there is one piece of news that will grab all the limelight for the entire year, it’s definitely going to the potential COVID-19 vaccine. Not limited to talk among the public, this also became a great point of debate during the US elections. As the race for the COVID-19 vaccine intensifies and we are on the last lap, the two front runners are gearing up. Moderna (MRNA) and Pfizer (PFE) are much ahead of other companies in this sprint and have already completed their phase 3 trials. As the Food and Drug Administration (FDA) inches closer to giving a green light to either vaccine, this will be an exciting next few weeks for both of these companies.

Moderna’s COVID-19 vaccine is 94.5% effective as per the phase 3 trial data. 42% of trial participants are from high-risk groups, which suggests its vaccines are going to be pretty effective and is going to be widely accepted. It has to be kept at a temp of 2-8 °C. Moderna hopes to ship 20 million doses by 2020’s end. At the same time, Pfizer’s vaccine has an efficacy of close to 95%. It also has to be kept at a temp of 2-8 °C. It’s Phase 3 trial conducted on 41,000 volunteers with different ethnicity and age groups, suggested a pretty good response to its vaccine. Pfizer has just requested that the FDA approve the emergency use of its vaccines potentially starting next month. Efficacy of both the vaccines looks pretty much the same based on the trial 3 results.

The FDA potentially can approve one or both vaccines by mid-December. The prospects of the efficacy of the vaccines are pretty bright. And at the same time, stock movement over the next few months is going to be exciting.

Let’s have a look at how these two companies are stacked against each other in the Market.

Pfizer Inc (NYSE: PFE)

Established in the year 1849, this 171-year-old company is one of the leading pharmaceutical corporations in the world. Headquartered in New York City, Pfizer develops and produces medicines and vaccines for a wide range of medical disciplines. Pfizer stock has gone through ups and downs this year, many times based on news related to COVID-19 vaccines. The stock has been almost at the same level compared to last year.

Pfizer stock performance during 2020 vaccine race
Pfizer (PFE) stock performance during 2020

Pros: Pfizer has a history of consistently paying dividends over years with a dividend yield continuously close to 4%. Also, since the stock has not gone up significantly in the last year, any positive news on the back of vaccine commercialization may have significant upside.

Cons: Being a behemoth, Pfizer stock moves slowly even on the back of positive news. Also, if last year’s stock price is anything to go by, the stock price might not witness significant movement.

Moderna Inc. (NASDAQ: MRNA)

Established in the year 2010, Moderna is a relatively new company which got listed just 2 years back. In December 2018, Moderna conducted the largest biotech IPO in history. It raised $600 Million USD, implying a valuation of $7.5 B. As of Nov 2020, Moderna almost moved 5 times in valuation to $35 B in the last 2 years. In this last year alone, the stock has moved 5 times primarily riding on COVID-19 vaccine news.

Moderna stock performance during 2020 vaccine race
Moderna (MRNA) stock performance during 2020

Pros: Moderna being a biotechnology company, has a lot of interest from many new age investors. Also, since it was able to develop the COVID-19 vaccine in a very short span of time, despite being such a small company, Moderna gained a lot of investor confidence in its management and capability.

Cons: The stock has moved almost 5 times this year and hence it might not have enough upside as most of the positive news has already been priced into the stock price. However, any negative news may have a significant detrimental effect on the stock price.

Here is a face to face comparison of both the stocks:

The face to face comparison of these stocks is nothing short of comparing a behemoth with a new entrant. Being a relative newcomer, Moderna has been able to move significantly up primarily based on the COVID-19 vaccine news. The market cap of Pfizer is almost 5 times that of Moderna, but when it comes to revenue it’s almost 600 times. Moderna does not have any profitability, rather it has seen a significant loss in the last 2 years. Pfizer has a consistent history of paying dividends which is going to soothe many conventional investors. Pfizer has decent EPS over the years and the P/E of close to 23 gives the possibility of this stock going up from here. Also, the COVID-19 vaccine can add to the profitability and in turn, help Pfizer improve its EPS.

Face to face comparison of Moderna and Pfizer
Face to face comparison of Moderna and Pfizer

So, if you are a conservative investor and want to protect your money and earn decent returns then Pfizer is the stock you should go for. But if you are an aggressive investor and have a lot of risk appetite, then you can go for Moderna as the stock still has potential upside from here. But the stock has significant downside as well, where the stock price can go down significantly. Take your own investment decision based on your risk appetite.

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COVID-19 Market – 4 Sectors (And A Few Stocks) That Are Winning During The Pandemic

The COVID-19 pandemic has impacted all aspects of our lives as we are in the process of embracing a new normal now. The way we travel, get entertainment or get connected has all gone for a 180-degree change in recent few months. On the other side of the pandemic, we will find new trends emerging, which will dramatically change things. This includes our health, how we communicate, how we consume entertainment, or our shopping and dining habits.

Below are some of the sectors which has done exceptionally well in recent months as the pandemic has spread its tentacles.

Technology for Communication:

In a previous post, we mentioned how technology has been booming since COVID-19. Work from home is here to stay long after the pandemic is gone. Many companies have already made it clear that some of their staff are never going to come back to the office, and they would continue to work from home after the pandemic. Employees are going to be physically away from each other but will connect virtually. Technology companies that help in this connectivity are going to do well in the future. Many companies have introduced new communicator products or enhanced their existing products. Microsoft Teams, Slack, and Zoom are some of the products which have seen exponential increase in user base.

Zoom which is now synonymous with virtual meetings, has witnessed lot of buying interest from the investors, and the share price has more than doubled in less than 6 months. When most  stocks reached their all-time low in last 6 months, Zoom achieved newer highs almost every day.

Zoom stock chart during COVID-19 pandemic

E Commerce Retailers:

With COVID-19 taking a toll on the social gatherings, brick and mortar retail has been impacted to the hilt. Online is booming and along with it, the ecommerce has been booming as well. The adoption rate in the United States has grown tremendously and people have embraced using ecommerce at a much more aggressive pace than before. Across the age group, people have accepted ecommerce as a necessity. This creates exponential growth and while it will pull back a bit after quarantines, it will continue to rise in the post-COVID-19 world.

Almost all the retailers in United States have their internet presence, whether it’s Target, Walmart or Bestbuy or any small retail store in the suburbs. One stock that has witnessed the most dramatic success during this pandemic is Amazon, which has almost doubled in last 6 months. Also, the share price of Amazon did not drop as significantly as other stocks in the stock market. The way it weathered the storm and retaliated has been truly phenomenal.

Amazon stock chart during COVID-19 pandemic

OTT Products:

With the pandemic preventing the social gathering, movie theatres are the obvious casualties in this COVID-19 era. There are other modes of entertainment also which has been impacted as well, whether it’s theme parks or trampolines most of these places have been impacted as the social gathering has been restricted all across the United States. Also, the traditional medium of Television has been outdated for the new age consumers who want to consume the content based on their taste and their demand. OTT (Over the Top) platforms have been able to successfully bridge this gap of entertainment lacuna and have witnessed enough demand from consumers.

The stock market has also rewarded the OTT stocks in this pandemic era. Companies which have focused on the consumer demand in providing the on-demand entertainment have successfully able to reap the benefits. Netflix is one such company which has benefited a lot. As the pandemic became more prevalent Netflix shares gained momentum and reached new highs. The stock has just blinked a bit for few days during the month of March and continued the uptrend for almost the entire last 1 year. As the pandemic encourages more social distancing and people to stay at home the demand for stocks like Netflix is just going to go towards the North.

Netflix stock chart during COVID-19 pandemic

Digital and Internet Economy:

The benefits of not relying on humans have never been more evident than during this pandemic. Hence companies who have been successfully able to automate the operations are going to be the winners coming out of this pandemic. Before COVID-19, the rationale behind leveraging artificial intelligence (AI) was primarily to get rid of the rising wage concerns and a lack of available workers. But it is more important in the current situation to impose automation and introduce IoT to ensure the operations are not impacted because of any such pandemic in the future. Also, the profitability and continuity of the business are going to remain intact.

When it comes to digitalization and introducing automation, one company that comes to the forefront is Tesla. Not only it’s a futuristic company which is going to change the way we commute from one place to another, it’s a company which has a completely different way of operating by introducing lots of robotics and automation. During this pandemic, Tesla stock has almost moved up 3 times in a matter of 6 months. As it continues to focus on automation and relies less on human power, this is going to come out as a winner from this pandemic and investors are going to keep this stock in their portfolio.

Tesla stock chart during COVID-19 pandemic

Which of these sectors you like the most and do you think would be the unequivocal winner?

stock market

The 5 Best Tech Stocks To Buy in 2020

The US stock market witnessed its most horrific times in recent years during this March as the fear of the Pandemic reached the zenith. However, the pullback rally from March has been unbelievable even though the macroeconomy has not improved ever since the downfall in the stock market. If you think the overall market pullback is astounding, then the pullback of the tech stocks is even more dramatic. When the overall market has been inching close to the pre-March number, the tech stocks have reached a new all-time high.

Tech stocks charts

What are the best tech stocks for 2020?

We have analyzed many tech stocks based on different parameters like P/E, dividend yield, and earning potential in the future and have come up with some of the best tech stocks to own in 2020. Here are some of our best picks considering both the fundamental analysis and near-term visibility.

Top 5 Tech Stocks for 2020
Our Top 5 Tech Stocks of 2020
  1. 1. Apple Inc (AAPL)

Apple has been the torchbearer when it comes not only to the tech stocks but to the overall economy. Apple has been primarily engaged in the design, manufacture, and sale of smartphones. But the revenue stream from personal computers, tablets, wearables, and accessories is steadily increasing in the recent past. Also, it is involved in related software, services, and networking solutions where the size of the pie is increasing as well.

With 5G just around the corner and mobile phones going through a renewal cycle, the revenue of Apple is going to increase steadily over the next few years. Also, the wearables market where Apple has been introducing new and innovative products will generate a steady inflow of cash flow.

With the recent stock split, it has been made more affordable to the retail investors and can go up from here as the demand for Apple stock goes up.

  1. 2. CISCO Systems (CSCO)

Established in 1984, CISCO Systems is one of the most established tech companies in the US. Cisco develops and manufactures networking hardware, software, and telecommunications equipment. CISCO is one of the consistent dividends paying stocks among the tech giants of Wall Street. The enterprise technology giant is also focusing on cloud computing solutions in addition to hardware that it sold to dominate in the early 2000s.

The focus on new-age technology solution would help the company relevant in current times. With a consistent track record of paying dividends and with a dividend yield of 3.57% this is one of the stocks which has a rare mix of growth and high dividend yield.

  • 3. Texas Instruments (TXN)

Texas Instruments is a slightly smaller but still substantial semiconductor and electronics firm valued at about $126 billion. Texas Instruments designs and manufactures semiconductors for a wide array of uses including visual displays, wireless controllers, and portable power supplies. Texas Instruments is in our list not only because of its revenue potential in the next few years but also because of its consistent track record of paying dividends.

With a dividend yield of around 2.6%, this stock is a good bet during the market downturn as well. With over 12% revenue expansion predicted next year, it has the growth potential tech investors are eyeing for.

  • 4. Facebook (FB)

Facebook is one of the leading social media companies in the world and boasts more than 2.6 billion monthly active users. On a larger base, Facebook is still growing that figure by about 8% annually. Around 2.9 billion people use either Facebook, WhatsApp, Instagram, or Messenger at least once a month. Facebook is yet to monetize some of it’s best assets especially WhatsApp and with that, the steady-state of revenue is going to continue for the next few years.

The move from traditional ways of advertising to digital ways of advertising has been increasingly getting mainstream attention and Facebook is going to be the leading beneficiary of this movement. With the steady free cash flow continuing in the next few years Facebook should be the next trillion-dollar company in US Market.

  • 5. HP Inc. (HPQ)

The last stock on our list has a relatively lower market cap but has the potential to go up the ladder. HP manufactures and markets printing, computing, and other home office systems. HP is known for its amazing personal computers and workstations. With the working from home norm staying for the foreseeable future and the demand for personal computers going up, revenue should continue to grow for the next few years. Also, the dividend yield of HP should help the investor to remain invested for a longer duration during a market downturn.