Breaking: 4 Billionaires Just Snatched Up 21.4 MILLION Shares of THIS Biotech Stock

Monday’s trading sessions ended with the SPY and QQQ hitting new highs... and the Dow lagging behind. Nothing surprising.

The S&P 500 inched up 0.1% and the tech-heavy Nasdaq climbed 0.3%, setting fresh records. Meanwhile, the Dow took a tiny nap, slipping 0.1%.

As far as this week, all eyes are on Fed Chair Jerome Powell’s congressional testimony and Thursday’s Consumer Price Index report. Economists predict a 3.1% rise in inflation, just like the good old days of early 2024.

(Source: NPR)

Before we get started, here’s the heatmap for today.

Breaking: 4 Billionaires Just Snatched Up 21.4 MILLION Shares of THIS Biotech Stock

Pfizer shareholders have been on a wild ride these past few years. The pandemic made them feel like they’d hit the jackpot, only for those COVID-19 profits to vanish quicker than a Little Caesars pizza at a teenage sleepover.

With disappointed investors fleeing, Pfizer's stock price has taken a nosedive, plunging over 30% since 2019. So, what do the billionaires know that we don’t? I have a hunch that says it might be quite a bit.

This year, they've been on a Pfizer buying spree. Steve Cohen of Point72 Asset Management snapped up nearly a million shares. Not to be outdone, Jeff Yass at Susquehanna grabbed about 1.5 million shares. 

(Source: The Wall Street Journal)

And just when you thought the shopping cart was full, John Overdeck and Jason Siegel from Two Sigma practically bought the pharmacy, acquiring a staggering 18.9 million shares in the first quarter alone.

Are these billionaires just nostalgic for their COVID-19 vaccine glory days, or is there something more at play?

Pfizer's COVID-19 profits might have dwindled, but they funneled that cash into potential blockbuster investments. Their $43 billion acquisition of Seagen, a cancer drug developer, is a prime example. 

One of Seagen's drugs, Padcev, just got FDA approval to treat advanced-stage bladder cancer, with analysts expecting it to rake in an extra $2.5 billion annually. Not too shabby, right?

But the fun doesn’t stop there. Pfizer has been rolling out new products to counter the dip in COVID-19 revenues. They’ve got Abrysvo, their RSV vaccine, and Penbraya, a meningococcal vaccine, showing strong sales. Plus, there’s Zavzpret, a migraine nasal spray, and Velsipity, a daily pill for ulcerative colitis, adding to the mix. 

Remember that Seagen acquisition? It also brought in a class of antibody-drug conjugates (ADCs) like Adcetris, Padcev, Tukysa, and Tivdak, bolstering Pfizer’s oncology portfolio. 

Adding another layer to Pfizer’s strategy, they’re diving into biotech incubators. Pfizer's program in San Diego connects startups with their experts and resources, aiming to discover the next big blockbuster. 

With giants like Eli Lilly also setting up shop in San Diego, it's clear the race for innovative treatments is on. Why all the fuss over incubators? Simple. They provide a sneak peek into groundbreaking research and potential early-stage investments. It's like having a VIP pass to the future of medicine.

On top of that, Pfizer's attractive 5.9% dividend yield at current prices makes it a tempting buy for those who prefer steady returns. The company's been upping its dividend since 2009, with no signs of stopping. This year's earnings are projected between $2.15 and $2.35 per share, more than enough to keep the dividends flowing. Who doesn’t love a bit of passive income, especially when it's this reliable?

Moreover, the Seagen acquisition has led to some serious belt-tightening, with Pfizer aiming to slash annual expenses by $4 billion before year's end. Despite appearances, Pfizer’s sales are growing at a decent clip for a giant in the pharma world. Strip away the COVID-19 product decline and a strong dollar, and you’ve got an 11% sales increase in the first quarter alone. Not bad for a company that's been written off by many.

With Pfizer's arsenal of new drugs, strategic acquisitions, and a strong presence in biotech incubators, it’s no wonder billionaires are piling in. They understand that when biotech gets it right, the returns can be astronomical. While there are no guarantees in the stock market, Pfizer doesn't need to shoot for the stars to offer solid returns. 

Trading at about 12.2 times forward-looking earnings, it's a compelling addition to any diversified portfolio. So, if you're looking for a blend of stability and potential, following the billionaires into Pfizer might not be a bad idea.

Stock.News does not have positions in companies mentioned.