Healthcare stocks are in focus after Pfizer began shipping its Covid vaccine in the US and the first vaccinations were carried out this week.
It’s not just the companies that develop and supply Covid vaccines that have caught a market analyst’s attention. Boris Schlossberg, managing director of FX strategy at BK Asset Management, said French pharmaceutical company Sanofi could be worth a second look.
Sanofi “has a very, very broad portfolio and is also a leader in making vaccines, not necessarily from Covid, just vaccine manufacturers. I think the whole move towards vaccination because of Covid awareness has grown very much and Sanofi will benefit from it in the next few years, “Schlossberg told CNBC’s” Trading Nation “on Monday.
As investors wait for those tailwinds to give the stock a boost, Schlossberg said current fundamentals and pipeline make Sanofi a solid health game too.
“It’s just kind of a very, very stable stock, too. It has a dividend of 3.8%, which makes it very attractive in this environment, and it has a very good drug called Dupixent, which basically treats eczema allows young people to have children, but it’s also indicated as a treatment for asthma. And I think that could be a very big drug, “said Schlossberg.
The US Food and Drug Administration approved Sanofis Dupixent for the treatment of dermatitis in children in May.
However, Sanofi stock lagged the broader healthcare sector this year. The stock is down 8%, compared to a 10% gain for the XLV Health Care ETF.
Ari Wald, head of technical analysis at Oppenheimer, relies on a group of health stocks rather than the entire sector.
“It was this story of two health problems in which an earlier step became much more diffuse at the beginning of the year, where there is a sector of belongings,” said Wald in the same segment “Trading Nation”. “We would advise against moving underweight large-cap pharmaceuticals against an overweight position in small-cap biotechnology.”
The Russell 2000 Biotech Index is up 57% so far this year. The pharmaceutical sub-sector S&P 500, which includes Pfizer and Merck, grew only 3% over the same period. Wald’s small-cap biotech purchase ideas include Exact Sciences, Iovance Therapeutics, and Vericel.
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