What happened with Moderna Inc. (Nasdaq: MRNA) shows just how tough it can be to invest in biotech companies during a pandemic.
On May 18, the firm’s shares soared 20% on news that it had begun phase 1 trials of a potential COVID-19 vaccine.
However, since then, unexpected side effects, company executives dumping their shares and other issues have raised concerns about the vaccine.
Not to mention that Moderna is a relatively new company without a single product on the market yet.
In a little more than a week, its stock price fell from $80 to $52 — a 35% plunge.
The Moderna example shows that you can lose a lot of money quickly by betting on the wrong biotech firm.
But there’s a better, safer way to invest in biotech right now: the “picks and shovels” companies such as West Pharmaceuticals Services Inc. (NYSE: WST).
WST specializes in making syringes and other injectors. Its products will be essential for delivering a COVID vaccine when we eventually have one that works.
Wall Street seems to love this stock, as its shares are up more than 60% since March 23. And as we get closer to a vaccine, WST will go even higher.
Brian Christopher recommended WST in his April 8 article, noting that it has increased its dividend payouts for 27 years in a row.
I asked Brian to share his thoughts on WST’s recent surge, and how readers should approach buying it.
WST Has a Great Future — but Be Patient
By Brian Christopher
What a move, eh?
WST jumped as much as 25% above its February high.
But, that was a huge move in a short period and it’s beginning to retrace a bit.
After closing above $218 on May 18, shares dropped to $201:
WST Soared in April and May Before a Small Retreat
A prospective investor should respect that pullback. Wait to see if shares continue their current uptrend before establishing a position.
The company has a great future, but there’s no need to rush to buy shares when you can be patient and get a better deal.
And if you bought WST when I recommended it on April 8 — congratulations! You’re already up more than 25%, with even bigger gains ahead.
As you can see, WST is an awesome opportunity. However, there’s an even better way to profit from the race for a COVID-19 vaccine.
In fact, Jeff Yastine is confident that even a small investment of a few hundred dollars in this company could turn into a massive windfall in the coming months.
That’s because this biotech firm has been at the forefront of COVID-19 testing and research. And believe it or not, its stock is still undervalued right now.
It won’t be that way for long, though.
In a brand-new presentation, Jeff explains why this stock will soar like no other stock has done before.
Assistant Managing Editor, Banyan Hill Publishing