Market Pulse: My largest holdings
Special to theTribune
For my client accounts my two largest holdings are both exchange-traded funds that are selected using a mechanical trading model.
Interestingly, one of the ETFs is the Invesco S&P 500 Low Volatility. While this ETF is held in my trading accounts it can also serve as a good buy-and-hold fund. It holds the least volatile stocks in the S&P 500 and is currently overweighting Consumer Staples, Utilities, and Healthcare.
Speaking of healthcare …
My largest stock holding is Pfizer (PFE), a stock that I expect to hold for a long time. Needless to say they are in the news because of their COVID vaccine. Investors have only recently realized that they had been grossly underestimating the future revenue stream for Pfizer as well as Moderna (a stock I don’t own), by tens of billions of dollars, maybe more.
Most of us assumed booster shots or additional doses were possible if not very likely. Why many investors acted as if one or two shots and COVID would be history like many other viruses is hard to explain. They were wrong.
We learned this week that those that received the Pfizer vaccine should get a booster shot eight months after their second dose. That means a 50% increase in revenue.
Pfizer stock is finally beginning to reflect reality, though it is only eight points higher than it was 20 years ago. Pfizer recently renegotiated contracts with European countries, raising prices by more than $4 a dose. They are awaiting the FDA’s full approval, not merely emergency use authorization, and that is expected within weeks. Full FDA approval would open up many markets. Much of the world is awaiting their first vaccination and later doses and booster shots, billions of them.
Lost in the focus on COVID is that Pfizer has a lot going for it apart from the vaccine. They have IBrance, Prevnar13, Eliquis, Xel-Janz and other big-selling drugs with non-COVID revenues growing 10% annually. They are also pursuing therapeutics to treat the early stages of COVID to avoid hospitalization. Their revenue stream will be stable no matter what happens to the economy. Add it all up, and factoring in the dividend yield (3.2%), Pfizer is a great value that has been hiding in clear sight for more than a year. Expect brief bouts of profit-taking, but very brief. Many people who missed the early opportunities will be buying the dips.
By the way, lost in all the negative COVID news is that the U.S. has shipped more than 110 million doses of coronavirus vaccine to 65 nations that are among the hardest hit in the world. That is more than all other country donations, including China and Russia, combined.
David Vomund is an Incline Village-based Independent Investment Adviser. Information is found at http://www.VomundInvestments.com or by calling 775-832-8555. Clients hold the positions mentioned in this article. Past performance does not guarantee future results. Consult your financial advisor before purchasing any security.
Support Local Journalism
Support Local Journalism
Readers around the Lake Tahoe Basin and beyond make the Tahoe Tribune's work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.
Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.
Your donation will help us continue to cover COVID-19 and our other vital local news.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User
The Fed is setting the stage to start tapering, i.e. reducing its bond buying and ultimately ending the program.