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DOW   32,920.46
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QQQ   300.92
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Institutions are Buying up Procter & Gamble Shares, Should you?

7 Great Biotech Stocks to Buy in Expectations of Better Days Ahead

7 Great Biotech Stocks to Buy in Expectations of Better Days AheadThe biotechnology (biotech) sector was one of the best performing sectors in 2020. Many companies saw their stock prices rise as the race was on for a Covid-19 vaccine.

However, many of these companies were pre-revenue companies. Or they were companies that only had one or two in-market products or therapies. And as the calendar turned to 2021, investors took notice. And what went up quickly went down. And in the case of the biotech sector, it came down hard.

One way to tell is to look at biotech ETFs. One of the most popular ETFs, the VanEck Vectors Biotech ETF (NYSEARCA:BBH) is down more than 15%. So you can imagine what it’s been like for many individual biotech stocks. If you’re a buy-and-hold investor, you’re licking some wounds right about now.

But investors who knew what companies to buy have done well. And many of those names will continue to lead the biotech sector in 2022. In this special presentation, we give investors seven biotech stocks that represent different aspects of this diverse sector. We’re confident there’s something for investors of all risk tolerances.

Quick Links

  1. Pfizer
  2. Moderna
  3. AbbVie
  4. Amgen
  5. Editas Medicine
  6. Cellectis
  7. Vertex Pharmaceuticals

#1 - Pfizer (NYSE:PFE)

Pfizer logo

We understand that starting with Pfizer (NYSE:PFE) may be off-putting to some investors. The company is polarizing, to say the least. However, as the omicron variant reminds us, the pandemic may be closer to an end than the beginning, but it still has some chapters to go. That means that Pfizer is likely to continue to generate strong revenue and earnings.

PFE stock is up 42% in 2021 easily outpacing the S&P 500 and to be fair the consensus price target of analysts tracked by MarketBeat shows the stock trading has peaked. However, the company released its last earnings report prior to the discovery of the omnicron variant. Since then, the stock has received several raised price targets from analysts.

And this bullish view is supported by Dan Ushman, CEO and Founder of the technical analysis software firm TrendSpider who believes PFE stock is displaying a strong technical outlook. In a research note, Ushman noted that PFE stock recently broke through a level of resistance and is now trading at an all-time high. Ushman believes that Pfizer may retest recent lows, but if it can stay above those levels it could break out to the upside. 

About Pfizer

Pfizer Inc is a research-based global biopharmaceutical company. It engages in the discovery, development, manufacture, marketing, sales and distribution of biopharmaceutical products worldwide. The firm works across developed and emerging markets to advance wellness, prevention, treatments and cures that challenge the most feared diseases. Read More 
Current Price
$43.97
Consensus Rating
Hold
Ratings Breakdown
4 Buy Ratings, 8 Hold Ratings, 0 Sell Ratings.
Consensus Price Target
$52.13 (18.6% Upside)




#2 - Moderna (NASDAQ:MRNA)

Moderna logo

The bullish narrative for Moderna (NASDAQ:MRNA) is nearly identical to that of Pfizer. Whether or not, a curated vaccine will be required to effectively deal with the omicron variant, Moderna is in a position for another strong year.

Where the case for Moderna becomes different and potentially more bullish is when you look beyond the pandemic. The company’s vaccine has been a significant proof of concept for mRNA technology. This means that Moderna may find it easier to get the approval of the technology over a wide spectrum of vaccines. Should that happen, the ceiling for MRNA stock may be much higher than that of Pfizer.

MRNA stock is up 147% for the year (as of this writing) and that’s with the stock being down sharply from its all-time high set earlier this year. That drop occurred after the company missed sharply on both its top and bottom lines when it reported earnings in November.

However, as Ushman points out Moderna’s stock is displaying a very similar movement to Pfizer. And if the company can maintain support above its closest Anchored Volume Weighted Average Price, it is giving investors a strong technical setup.

About Moderna

Moderna, Inc engages in the development of transformative medicines based on messenger ribonucleic acid (mRNA). Its product pipeline includes the following modalities: prophylactic vaccines, cancer vaccines, intratumoral immuno-oncology, localized regenerative therapeutics, systemic secreted therapeutics, and systemic intracellular therapeutics. Read More 
Current Price
$174.30
Consensus Rating
Buy
Ratings Breakdown
5 Buy Ratings, 5 Hold Ratings, 0 Sell Ratings.
Consensus Price Target
$192.00 (10.2% Upside)




#3 - AbbVie (NYSE:ABBV)

AbbVie logo

If you’re looking for a company that’s delivering market-beating performance without the controversy surrounding vaccine plays, AbbVie (NYSE:ABBV) is an exceptional choice.  In addition to having several established drugs, like Humira, the company has a robust pipeline that gives investors reason to believe the company will continue to deliver strong revenue and earnings even when Humira faces generic competition in the United States.

Another reason to look at AbbVie is as a hedge against inflation. The company offers an exceptionally reliable dividend as evidenced by its inclusion in the elite Dividend Aristocrat club. This means it has increased its dividend for at least the last 25 years. In the case of AbbVie, the number is 49 years which puts it one year away from being a Dividend King.

That being said, ABBV stock is at or near an all-time high. And some investors may wonder how much upside is left. The analysts tracked by MarketBeat do give the stock a slightly higher price. The stock looks to be trying to find support just below its all-time high. If it’s successful, investors may be looking at another leg higher.

About AbbVie

AbbVie, Inc is a research-based biopharmaceutical company, which engages in the development and sale of pharmaceutical products. It focuses on treating conditions such as chronic autoimmune diseases in rheumatology, gastroenterology, and dermatology, oncology, including blood cancers, virology, hepatitis C virus (HCV) and human immunodeficiency virus (HIV), neurological disorders, such as Parkinson's, metabolic, comprising thyroid disease and complications associated with cystic fibrosis, pain associated with endometriosis, and other serious health conditions. Read More 
Current Price
$146.60
Consensus Rating
Hold
Ratings Breakdown
6 Buy Ratings, 7 Hold Ratings, 1 Sell Ratings.
Consensus Price Target
$160.56 (9.5% Upside)




#4 - Amgen (NASDAQ:AMGN)

Amgen logo

The next stock on our list has a similar story to AbbVie. That is, Amgen (NASDAQ:AMGN) has several high-revenue generating products in the market. Some of the most common names are Enbrel to treat plaque psoriasis, rheumatoid arthritis, and psoriatic arthritis; Neulasta which reduces the chance of infection for cancer patients; and Otezla which is also used to treat plaque psoriasis and psoriatic arthritis.

Although AMGN doesn’t have as attractive of a technical setup at the moment, the stock does appear to be forming a level of support of around $197. If that proves to be the case, then investors may have reason to believe the analyst's forecast for a price target of around $230 will be accurate. And in the meantime, Amgen is offering an attractive dividend for sticking around. The company currently pays out $7.04 on an annual basis and the company has increased its dividend in each of the last 10 years.

About Amgen

Amgen, Inc is a biotechnology company, which engages in the discovery, development, manufacture and marketing of human therapeutics. Its products include the following brands: Aranesp, Aimovig, KANJINTI, EVENITY, AMGEVITA, AVSOLA, BLINCYTO, MVASI, Corlanor, Enbrel, EPOGEN, IMLYGIC, Kyprolis, Neulasta, NEUPOGEN, Nplate, Parsabiv, Prolia, Repatha, Sensipar, Vectibix, Otezla, RIABNI, and XGEVA. Read More 
Current Price
$246.41
Consensus Rating
Hold
Ratings Breakdown
5 Buy Ratings, 5 Hold Ratings, 4 Sell Ratings.
Consensus Price Target
$254.07 (3.1% Upside)




#5 - Editas Medicine (NASDAQ:EDIT)

Editas Medicine logo

To this point, we’ve focused on biotech stocks that are trading near their all-time highs. Editas Medicine (NASDAQ:EDIT) presents investors with the opposite case. At this time, EDIT stock is trading near its all-time low.

Editas has only been publicly trading since 2016 so there’s not a long history here. And that’s okay because this stock is all about the future, specifically the field of gene editing. Along with many gene-editing stocks, EDIT stock soared to over $90 a share early in 2021 as the sector went into a short-lived bubble.

The price movement since then illustrates the volatility in this nascent field. Editas doesn’t have a product on the market and maybe years away from doing so. That being said, the company appears to have enough cash on hand to get it through 2023. By that time, it may be able to bring one of its therapies to market.

Although the consensus opinion of analysts tracked by MarketBeat gives EDIT stock a Hold rating, it also has a price target with a 95% upside. That aligns nicely with the company’s stock chart which suggests that the stock is oversold which may make it attractive to risk-tolerant investors.

About Editas Medicine

Editas Medicine, Inc engages in the development and commercialization of genome editing technology. Its technology includes clustered, regularly interspaced short palindromic repeats (CRISPR), and CRISPR associated protein 9 (Cas9). The company was founded by Feng Zhang, Jennifer A. Doudna, George McDonald Church, J. Read More 
Current Price
$10.41
Consensus Rating
Hold
Ratings Breakdown
5 Buy Ratings, 8 Hold Ratings, 2 Sell Ratings.
Consensus Price Target
$16.73 (60.7% Upside)




#6 - Cellectis (NASDAQ:CLLS)

Cellectis logo

For even more risk-tolerant investors, Cellectis (NASDAQ:CLLS) is a biotech stock that is currently trading under $10. Like Editas Medicine, Cellectis is in the field of gene editing. However, whereas Editas uses the CRISPR/Cas9 platform, Cellectis uses a gene-editing technology called TALEN.

The company also specializes in oncology treatments and has six candidates in its pipeline including three wholly-controlled candidates. That being said, CLLS stock is down 68% in 2021 and it’s unclear at this time whether the stock has found a floor.

However,  analysts remain very bullish on CLLS stock with a consensus price target of $23.25 which would be a gain of 170% from its current price. And the stock does appear to be gaining interest from institutional investors, which is usually a signal that the stock could be ready to rise.

About Cellectis

Cellectis SA operates as a clinical stage biotechnological company. The firm operates through the segments: Therapeutics and Plants. The Therapeutics segment focuses on the development of products in the field of immuno-oncology and monogenic diseases. The Plants segment focuses on using Calyxt's proprietary PlantSpringTM technology platform to engineer plant metabolism to produce innovative, high-value, and sustainable materials and products for use in helping customers meet their sustainability targets and financial goals. Read More 
Current Price
$3.10
Consensus Rating
Hold
Ratings Breakdown
2 Buy Ratings, 0 Hold Ratings, 1 Sell Ratings.
Consensus Price Target
$9.80 (216.1% Upside)




#7 - Vertex Pharmaceuticals (NASDAQ:VRTX)

Vertex Pharmaceuticals logo

The last biotech stock on our list is Vertex Pharmaceuticals (NASDAQ:VRTX). Vertex is the industry leader in the treatment of cystic fibrosis with four drug treatments on the market. And investors will appreciate that those treatments are capable of treating 90% of patients with cystic fibrosis. That gives the company a virtual monopoly in a huge addressable market.

In November, Vertex posted its third consecutive earnings report in which it beat both top and bottom-line estimates.

That being said, the stock is down 19% for the year despite being up 10% in the last month. This is creating an interesting dynamic in that VRTX stock is now approximately back to where it was after the market selloff to start the pandemic. This may be an example of investors simply rotating out of the segment and Vertex being caught in the wash.

Analysts give the stock a consensus price target of $255.12 which would give it a 23% upside from its current price.

About Vertex Pharmaceuticals

Vertex Pharmaceuticals, Inc is a global biotechnology company, which engages in the business of discovering, developing, manufacturing and commercializing small molecule drugs for patients with serious diseases. The firm focuses on development and commercializing therapies for the treatment of cystic fibrosis, infectious diseases including viral infections such as influenza and bacterial infections, autoimmune diseases such as rheumatoid arthritis, cancer, inflammatory bowel disease and neurological disorders including pain and multiple sclerosis. Read More 
Current Price
$317.27
Consensus Rating
Buy
Ratings Breakdown
9 Buy Ratings, 6 Hold Ratings, 0 Sell Ratings.
Consensus Price Target
$322.79 (1.7% Upside)



 

The Warren Buffett missive to “be greedy when others are fearful” may not be completely accurate when it comes to biotech stocks. Many stocks in the sector are quality names that deserve a place in portfolios at any time.

However, it does serve as a reminder that the madness of crowds can apply to stocks that are on the way down just as quickly as stocks that are on the way up. That is, sometimes FOMO (Fear Of Missing Out) on the way up turns into simple fear on the way down.

But in that fear, there can be an opportunity. The biotech industry is offering some fascinating potential in the areas of gene editing and gene therapy. For risk-tolerant investors, this is likely to be an area where the strongest gains will be made.

However, there may still be some turbulence before we get there. The stocks in this presentation appear to have strong fundamental and/or technical cases that make them worthy of your consideration.

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