Should You Invest In these Stocks?
3 Under-the-Radar Biotech Stocks with Nvidia Potential
Where is the Market Leading?
The biotech sector plays a crucial role in any economy, yet picking under-the-radar biotech stocks can be challenging due to the long development times and the inherent risks of clinical trials. However, the rewards can be significant for patient investors. Here are three biotech stocks with immense potential and diverse pipelines that could generate substantial gains.
AbbVie (ABBV)
While the market has its eyes on Novo Nordisk (NYSE) and Eli Lilly (NASDAQ), AbbVie (NYSE) is flying under the radar despite its strong performance. The stock is up 7% year-to-date (YTD) and 27% over the past few months, currently trading at $171. AbbVie boasts an impressive drug portfolio and a promising pipeline of potential blockbuster drugs.
AbbVie's biggest moneymaker, Humira, generates $4 to $5 billion annually. Despite increasing competition, AbbVie continues to report strong revenue. The acquisition of Allergan has added Botox to its portfolio, which has seen growing popularity worldwide. AbbVie’s strategy of growth through mergers and acquisitions has expanded its portfolio significantly.
The company has also raised its adjusted EPS guidance for the year to $11.13 to $11.33, higher than the previous guidance of $10.97 to $11.17. With a dividend yield of 3.61% and a history of steadily increasing payouts over the past decade, AbbVie is well-positioned for future growth.
Pfizer (PFE)
Pfizer (NYSE) became a household name during the pandemic, but its potential extends far beyond the COVID-19 vaccine. Although the stock has seen a dip in revenue due to declining vaccine demand, this correction presents a buying opportunity. Trading at $27, the stock is down 5% YTD and 23% over the past 12 months.
Pfizer has a robust pipeline with over 100 candidates, including 37 in late-stage development. The company has used its pandemic windfall wisely, acquiring Seagen for $43 billion to enhance its focus on cancer treatments. Pfizer aims to double the number of patients treated by 2030.
Pfizer is also known for its impressive dividends, boasting a 6% yield and 14 consecutive years of dividend increases. As the company resumes growth, investors can expect further dividend hikes.
Vertex Pharmaceuticals (VRTX)
Vertex Pharmaceuticals (NASDAQ) is another under-the-radar biotech stock worth considering. Known for its cystic fibrosis treatment, Vertex has expanded into gene-editing therapies. Trading at $468, VRTX stock is up 14% YTD and 34% over the past 12 months.
Vertex reported impressive first-quarter numbers with revenue of $2.69 billion, a 14% year-over-year (YOY) increase, and ended the quarter with $14.6 billion in cash. Its EPS came in at $4.76, with management expecting double-digit revenue growth.
The company remains the sole seller of cystic fibrosis treatments, generating $2.7 billion in first-quarter sales, up 13% YOY. Vertex has also submitted applications for a triplet therapy that includes Vanzacaftor, which could earn approval by the end of the year. With significant investments in research and development, Vertex's dominance in the industry makes it one of the best biotech stocks to own right now.
Conclusion
Investing in biotech stocks can be challenging due to the sector's inherent risks and long development timelines. However, companies like AbbVie, Pfizer, and Vertex Pharmaceuticals have demonstrated strong potential with their robust pipelines and strategic growth initiatives. Patient investors willing to navigate the complexities of the biotech sector could find these under-the-radar stocks to be rewarding long-term investments.