Are Pfizer and BioNTech the Best Pharmaceuticals to Bet on Right Now?

I’ve said it before, and I’ll say it again … you can absolutely lose your mind by trying to follow the news these days. That’s even more true if you’re trying to use the news as a resource to time the market.

On Monday, Pfizer Inc. (NYSE: PFE, Rated “C+”) and BioNTech SE (Nasdaq: BNTX, Rated “D”) announced that their COVID-19 vaccine has a demonstrated efficacy rate above 90% at seven days after the second dose. That means protection is achieved 29 days after the initial vaccination and requires a two-dose schedule.

This news prompted shares to soar for both companies, as well as a broad market rally. So, the question is: Should we get in now? Or is there a better place to put our money?

Let’s check how these two hold up according to the Weiss Ratings algorithm.

Shares of both Pfizer and BioNTech spiked on Monday. That’s great for anyone who was holding shares … but I hope they took their gains and ran. Shares of both have been cooling off over the past two days.

Looking back further, Pfizer has bounced between a “C” and a “C+” since March. Our ratings system identifies the stock as about average based on its track record and current valuation, identifying it as a “hold”.

On the other hand, BioNTech is in the “sell” category with a “D” rating. Our ratings system labels it as an underperformer relative to other common stocks with a similar amount of risk.

As many states are seeing increases in COVID-19 cases, their vaccine announcement is great for them and for the general economy overall … but I’m going to say it doesn’t mean much for investors, at least right now.

Neither company is screaming “buy” according to the standards of the Weiss Ratings. As such, I decided that I wanted to see which companies would be better investments for anyone wanting to add pharmaceutical exposure to their portfolio.

So, I pulled up the Weiss Ratings stock screener to see which pharmaceutical companies had a “buy” rating. If you want to take a look yourself, add the criteria to search by industry. Then you can select “pharmaceuticals, biotechnology and life sciences” from the menu.

The top-rated firm in that industry is Thermo Fisher Scientific Inc. (NYSE: TMO, Rated “B+”). With an annual revenue exceeding $25 billion, the company is a world leader providing medical instruments, equipment software and supplies.

The company has maintained a Weiss Ratings “buy” rating since 2014 and has continued paying its dividend through this uncertain year. At the end of October, the company released its third-quarter earnings and saw revenue increase 36%. Of that total, $2 billion was COVID-19 related, but did not include any impact of the two new antibody tests that the company just announced last month.

And investors have been noticing its resiliency.   

Shares are up 48% since the beginning of the year … but also down 8% off last Friday’s high. This creates a discounted buying opportunity for anyone that wants to add this giant to their portfolio.

Next up is Bio-Rad Laboratories, Inc. (NYSE: BIO, Rated “B”), a leader in developing, manufacturing and marketing a broad range of products for the life science research and clinical diagnostic markets.

Shares of Bio-Rad are up 57% since the beginning of the year. But, just like Thermo Fisher, shares are down 9% since hitting a high last Friday. Despite that correction, shares remain above its 50-day moving average.  

Last, but not least, we have Amgen Inc. (Nasdaq: AMGN, Rated “B”). Amgen focuses on inflammation, oncology, bone health, cardiovascular disease, nephrology and neuroscience therapeutics worldwide.

The company has been rated a “buy” since Aug. 12, 2019, but unlike most companies in this industry, it has not seen investor love.

Despite all the movement, shares have literally gone nowhere since the beginning of the year. Last week our ratings system upgraded the stock from a “B-” to its current “B” rating. The model noted that operating cash flow increased $18.00 and earnings per share increased from $3.05 to $3.43.

It seems like investors are sleeping on this one right now. And it could be a good option if you’re looking to add pharmaceutical exposure to your portfolio.

The news always causes movement. Usually it’s quick and short-lived. If you happen to have a position get splashed across the headlines, great! But I’d recommend taking those gains and running before its 15 minutes of fame wanes.

If you’re looking for more long-term exposure, you’ve got the perfect tool for the job — the Weiss Ratings.

Best,

Kelly Green