Some stocks and industries may appear as short-term prospects, but you may need to look deeper to realize that they have long-term opportunities too. Things aren’t always what they seem, is what you realize in online stock trading.
The Covid-19 Vaccine Industry’s Astronomic Rise
Pharmaceutical companies developing vaccines for Covid-19 suddenly shot into popularity in 2020, understandably due to the soaring number of pandemic cases all over the world. As a result, stocks of these companies soared massively, rewarding investors who had trusted in them.
Companies such as BioNTech ($BNTX) and partner Pfizer ($PFE), Novavax ($NVAX), and Moderna ($MRNA) were stocks at the forefront of the vaccine race and soared as a result. Vaxart ($VXRT) was far behind in the race though, but even that stock rocketed 1,500% last year. Its oral Covid-19 vaccine candidate is still in the clinical trial phase.
The following chart YCharts on Fool.com shows the impressive growth of the above mentioned stocks in 2021:
However, it was worth noting that most of the investors who picked up these stocks were following short-term trading strategies. There was a concern that this sudden growth would eventually fade away once the pandemic dies, making these stocks not the right choice for long-term investors.
Potential for Long-term Growth
The fact is that there are new variants of the pandemic emerging. It is an unfortunate situation for the world, but it indicates that there are long-term prospects for vaccine stocks. More and more countries are realizing that serious steps need to be taken to protect their people from the pandemic so as to prevent a major health and economic crisis. That results in more contracts being awarded to vaccine manufacturers not just for the vaccines but also the booster doses.
Moderna and BioNTech in Long-term Contracts
Canada is one of those countries that recently signed an agreement for vaccine and booster doses all through 2024. Moderna is the big beneficiary here, with the contract amounting to 105 million doses. Moderna has also been awarded contracts from Switzerland and Israel running through 2023. Apart from these, Moderna also has advance purchase agreements worth $12 billion in place and has options to extend these to a further $8 billion. These contracts have already reached the same figure as Moderna’s expected revenue of $20 billion from vaccines this year. As you probably know, BioNTech has partnered with Pfizer. They have struck a deal with the European Union to deliver 1.8 billion doses through 2023.
The Need to Transform Covid-19 from Pandemic to Endemic
Researchers believe that with natural immunity to the disease rising and vaccination numbers also increasing, the pandemic will eventually cease to be a global phenomenon and become endemic to certain regions or communities or among certain sections of the population. The widespread nature of Covid-19 is what countries are seeking to minimize with the vaccine by making it an annual routine for their citizens. So, the demand for vaccines is likely to be high for a few more years.
That certainly presents a longer term opportunity than what was initially thought. These insights could make a difference for your trading strategy along with the services of direct access trading platforms.
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