Title: Two Healthcare Stocks Worth Investing in and One to Steer Clear Of
In the realm of long-term investing, healthcare is a sector that consistently shines due to its universal necessity. With aging populations across major nations like the U.S., the demand for healthcare products and services is projected to skyrocket in the coming years. However, not all healthcare stocks are created equal. Let's dive into three noteworthy picks and one to steer clear of.
Go All In on BioNTech (BNTX)
The third quarter of 2021 saw BioNTech generate impressive revenue of over 6 billion euros ($6.9 billion), largely from its COVID-19 vaccine in partnership with Pfizer. While the market for this vaccine has since declined, revenues rebounded by 39% in Q3 of 2022. But the real story lies in BioNTech's promising pipeline.
Despite the drop in revenue, BioNTech is still a strong buy for several reasons:
- ** pipeline potential:** BioNTech is planning to launch its first cancer therapy in 2026 and aims to secure regulatory approvals for 10 cancer indications by 2030. The company has two cancer programs in late-stage testing and 12 in phase 2 clinical trials.
- Undervalued stock: With an enterprise value of around $11.8 billion, BioNTech's valuation is only 4.5 times the expected 2024 sales. This is significantly lower than the average biotech stock, which trades at more than 7.7 times sales, making BioNTech a bargain pick.
Embrace TransMedics Group (TMDX)
TransMedics Group's share price has struggled recently, falling after missing Q3 revenue and earnings estimates. However, its Organ Care System (OCS) technology, which keeps donor organs alive and preserved until transplantation, offers considerable growth potential. OCS is currently the only warm perfusion technology approved by the FDA for multiple organs.
With a focus on organ transport and regulatory approvals in key European countries, TransMedics Group is an intriguing long-term investment opportunity.
Avoid Walgreens Boots Alliance (WBA)
Walgreens Boots Alliance's recent stock chart performance leaves much to be desired. Despite its low share price of 5.5 times forward earnings, this stock may be a value trap. Competition within the retail pharmacy market is fierce, with companies like Amazon and Walmart on the scene, and Walgreens still battling a significant debt load of over $33.8 billion.
While Walgreens may turn things around, investors could be better off staying on the sidelines, at least for now.
Sources:1. BioNTech2. Walgreens Boots Alliance3. TransMedics Group
- Given the strong performance of BioNTech in the third quarter of 2021 and its promising pipeline in cancer therapy, smart investors might consider increasing their finance portfolio by investing in BioNTech's stocks.
- In the world of finance, TransMedics Group might be an appealing long-term investment due to its innovative Organ Care System technology and potential regulatory approvals in Europe.
