Fall COVID-19 Boosters Are around the Corner – What Our System Says about the Companies Making Them

By TradeSmith Editorial Staff

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With the summer season coming to a close, health officials are looking ahead and worrying that the colder months will bring a resurgence of COVID-19 cases.

As you can see in the chart below, in January 2021 and January 2022, the United States experienced two large peaks in hospitalized COVID-19 patients.

In an effort to minimize hospitalizations, the Food and Drug Administration has authorized Pfizer Inc. (PFE) and Moderna Inc. (MRNA) to roll out millions of new COVID-19 boosters.

These boosters will target not only the original strain but also the omicron subvariants, BA.4 and BA.5.

Pfizer generated $36.7 billion in sales last year from its COVID-19 vaccine, and Moderna’s vaccine generated $17.7 billion in sales. For 2022, Pfizer is expecting less revenue from vaccine sales but still a massive $32 billion, while Moderna is projecting an increase in sales to $19 billion.

With this fresh news that the booster shots were just approved, I wanted to put Pfizer and Moderna through our system, as it has offered powerful guidance on what to do and when to do it for years now.

Pfizer and Moderna Put to the Test

With Pfizer, our system triggered its most recent Entry Signal (green “E”) on May 13, 2021, when the stock was trading for $38.48. It then entered the Red Zone (red bell) on Feb. 22, 2022, at $46.92.

For anyone following along, that would have been a 21.93% profit in less than 10 months.

And anyone using our system to trade Moderna made even more money. Between its Entry Signal in December 2019 and entering the Red Zone in January 2022, the stock returned a stellar 879% windfall.

But currently, both of these stocks are in the Red Zone, and MRNA has a sky-high-risk Volatility Quotient (VQ) of 65.67%.

As we can see from the previous examples, those who trusted our system were rewarded mightily. And I’m trusting it now when it says to stay away from both PFE and MRNA.

Of course, just as important as knowing what to stay away from is knowing what opportunities to add to your radar.

When I ran a search through our Screener tool, one health care stock popped up in our Green Zone.

Focus on Broad Health Care

Instead of focusing on companies that just create pills and vaccines, considering WHERE people go to receive medicine, wellness products, and health services can reveal a broader opportunity.

That led me to CVS Health Corp. (CVS) and its massive reach in the health care world.

The company got its start in 1963 by selling health and beauty products, but anyone still viewing this as a generic drugstore chain has missed CVS’s transformation into a health care juggernaut.

Source: CVS 2021 Annual Report

It’s becoming a one-stop shop where doctors, insurance companies, and pharmacies can more easily share information, giving people a reason to exclusively use CVS.

CVS acquired the health insurance company Aetna in 2018, which incentivizes those with Aetna to use CVS because medical information is easily shared between the insurance company and CVS Pharmacy. It also acquired the specialty pharmacy company Apothecary By Design in 2018.

In terms of medical evaluations and treatment, CVS offers an array of in-person services at certain locations.

Source: CVS.com

Its COVID-19 vaccines and testing alone led to 43 million new CVS customers, and 15% of customers new to CVS through testing services chose to fill new prescriptions or receive vaccinations through CVS.

Final Thoughts

CVS has quietly been building itself a moat, as not many other companies have the competitive advantage of offering on-site care, a connected insurance system, and a pharmacy all in one place.

It’s also in the running to acquire another company that would give it an additional advantage in the “home-based health” services market, which you can find out more about here.

While it is on the smaller side, CVS’s dividend of 2.18% rewards investors with income in the here and now.

The stock is currently in our Green Zone, and CVS is also in the portfolio of three billionaires that we track.