Post-Vaccine Stock Picks: Short-term Spikes and Long-term Best Bets

There’s a light at the end of the tunnel and it’s not an oncoming train. With a vaccine from Pfizer (PFE) already in distribution mode, and Moderna (MRNA) expecting FDA approval any day, we may actually see an end to Covid-19 in 2021. Take a deep breath. It’s almost over.

Surprisingly, neither of these pharmaceutical companies seem to be showing gains on Wall Street. Pfizer is actually down 4% this week. Moderna lost 15%. Are we missing something? Didn’t the “experts” tell us to invest in these companies?

Chalk it up to natural market volatility if you like. Blame it on the changing political climate in the US or the uncertainty over the impact of vaccines. You could also follow my general rule of thumb. Never invest in pharmaceutical companies, no matter how good they look.

Looking Beyond the Pharmaceutical Sector

Moderna was a hot topic on the golf course this summer. My friends know that I’m a financial writer, so I’m always getting dragged into those discussions. Their shared enthusiasm over RNA technology from a Cambridge biotech firm almost caused me to break my own rule.

Common sense prevailed. One important lesson I have learned about stock investing is to never put all your eggs in one basket. An approved vaccine may or may not raise the stock price of the developer. The presence of that vaccine will definitely benefit multiple market sectors.

Why did Airbnb (ABNB) choose to go public on December 9th after losing 42% of its value earlier in the year? They weren’t gambling. The hospitality sector will be a primary beneficiary of a successful vaccine. Pfizer scored emergency use authorization from the FDA on December 11th.

It’s time to rebalance your portfolio. Stay-at-home stocks like Zoom (ZM) and Netflix (NFLX) made me a few dollars this year. I don’t expect much from either in 2021. Value stocks in the health care and consumer discretionary sectors are where I’m placing my bets right now.

Short-term Spikes: Where to Go for the Fast Money

Dmitry Perepelkin, a good friend and founder of Tickeron, taught me that there’s a big difference between stock traders and stock market investors. Traders want to make money right now. Investors don’t mind short-term losses, as long as they see long-term gains.

Analyzing chart patterns does not interest me at all. My personal blog is called Common $ense for a reason. I look at human behavior and seasonal trends. It’s the end of the year, the holiday season, and many people are still quarantined. What do you think is going to happen?

Amazon (AMZN) will spike next week. You can probably expect eBay (EBAY) to do the same, but I wouldn’t hold it past January 1st. Bitcoin (BTC) will rise slightly, and then fall by Christmas Eve. Any one of these could put short-term money in your pocket before New Year’s Day.

Moderna (MRNA) might be worth a quick options play, but it’s a serious gamble. FDA approval didn’t do much for Pfizer’s stock, but Moderna has the capacity to delivery more doses faster. I’ve always considered them the dark horse in the vaccine race. This may be their moment.

Long-term Best Bets: My Picks for 2021

I despise stock promoters, so please don’t put me in that category. I’ve had some success playing the market and people ask for my advice all the time. What I share here is the same advice I give to close friends and family. This is what I plan to do to get ready for 2021.

In the health care sector, I’m going with Johnson and Johnson (JNJ) because their diverse product line gives them big earnings potential when retail starts to open up again. I’m also betting on PRA Health Sciences (PRAH), a clinical research and data solutions company.

PRA Health Sciences provides outsourced clinical development services to biotech and pharmaceutical companies. They also do data analytics in the same sector, making them a commonsense pick for the vaccine distribution era we have coming next year.

Another safe bet in the health care sector is CVS (CVS). Their stock has clawed its way back to pre-pandemic value and they’re positioned well for pandemic recovery. I’m going with them and also Merck (MRK), which is down 10% this year, but poised for a comeback.

My consumer discretionary pick is a company called Booking Holdings (BKNG). They’re the entity behind, Priceline, OpenTable, and others. I actually bought them a month ago when vaccine approval seemed imminent. They’re up 34% in the past thirty days.

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About the Author

Post-Vaccine Stock Picks: Short-term Spikes and Long-term Best Bets

Kevin Flynn

A former financial professional and founder of AdvisorScale Financial Writing, Kevin lives in Leominster, Massachusetts with his wife Evelyn, two cats, and nine wonderful grandchildren.