Healthcare stocks are concentrated after Pfizer began shipments to the United States of its Covid vaccine and the first vaccines were administered this week.
Not only has a market analyst caught the attention of companies that develop and distribute vaccines against Covid. Boris Schlossberg, CEO of BK Asset Management’s FX strategy, said French pharmaceutical company Sanofi could be worth a second look.
Sanofi “enjoys a very wide portfolio and is also a leader in vaccine manufacturing, not necessarily Covid, but only vaccine manufacturers, and I think the whole step towards vaccination due to Covid awareness has grown quite a bit and Sanofi will benefit from it in the next two years, “Schlossberg told CNBC’s” Trading Nation. “
While investors expect tailwinds to increase stocks, Schlossberg said its current fundamentals and pipelines are also turning Sanofi into a health game.
“It’s also a very, very stable kind of stock. It has a dividend of 3.8%, which makes it very attractive in this environment and it has a very good medicine called Dupixent, which basically allows the treatment of Eczema in young children, but it is also indicated as a treatment for asthma. And I think it could be a very big medicine, “Schlossberg said.
The U.S. Food and Drug Administration approved the Sanofi Dupixent in May for the treatment of childhood dermatitis.
However, Sanofi shares have lowered the performance of the broader healthcare sector this year. Shares have fallen 8% compared to a 10% gain for health XLV XET.
Ari Wald, head of technical analysis at Oppenheimer, is committed to a health stock group rather than the entire sector.
“It’s been this story of two health care where what had been a broader movement earlier this year has spread much further where you have a sector of people who don’t have it,” Wald said during the same segment of ” Trading Nation “. “We would be advising to go with a low-weight large-cap pharmaceutical versus an overweight position in small-cap biotechnology.”
The Russell 2000 biotechnology index has risen 57% so far this year. The S&P 500 pharmaceutical subsector, which includes Pfizer and Merck, is up just 3% on the same stretch. Wald’s small-cap biotechnology buying ideas include Exact Sciences, Iovance Therapeutics, and Vericel.
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