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Invest in These Two Stocks before 2024's Finish Line 🏃‍♂️🏃‍♀️

Title: Two Unmissable Stocks to Invest in Before 2025's Dawn
Title: Two Unmissable Stocks to Invest in Before 2025's Dawn

Invest in These Two Stocks before 2024's Finish Line 🏃‍♂️🏃‍♀️

It's my belief that the stock market's current state leans towards being overvalued. And I'm not alone in this thought, as renowned investor Warren Buffett's actions demonstrate. Buffett, known as the Oracle of Omaha, continues to divest from stocks and build a record-breaking cash hoard for Berkshire Hathaway. This move suggests that he shares my sentiment of caution, given that he's been known to describe times like these as when "behavioral finance isn't finance—it's psychology."

Now, does this mean there aren't any decent picks for investors? Absolutely not. There are stocks that aren't overpriced, and three of them particularly stand out.

1. BioNTech

First up is BioNTech (BNTX -3.73%). While sales of its COVID-19 vaccine in conjunction with Pfizer are no longer at peak levels, I believe it's the company's pipeline, and not its joint COVID vaccine, that offers significant potential.

The biotech company is currently evaluating four programs in late-stage testing, two of which focus on cancer therapies. Furthermore, it has 13 candidates in phase 2 testing, with all but one targeting various types of cancer. BioNTech expects to launch its first cancer immunotherapy within the next two years and aims to bag 10 indication approvals in oncology by 2030.

But the market appears to be undervaluing BioNTech's pipeline, considering its current enterprise value of around $11 billion. This lowly valuation doesn't proportionately reflect the company's projected $2.6 billion in sales for this year alone. With a price-to-sales ratio of 4.2, BioNTech's valuation is significantly lower than the biotech industry's average of 7.5. If we trust the market, we'd label BioNTech's pipeline worthless. However, I believe it presents an excellent opportunity for investors.

2. Vertex Pharmaceuticals

Another smart investment prospect is Vertex Pharmaceuticals (VRTX 0.93%). The company is finalizing two new product approvals from the FDA in January 2025, including a vanzacaftor triple-drug combo for treating cystic fibrosis (CF) and suzetrigine for managing acute pain.

The vanzacaftor triple offers a more accessible dosing schedule and greater power than Vertex's blockbuster drug Trikafta, making it a potential frontrunner for their most profitable CF treatment ever. Suzetrigine, a non-opioid pain therapy, addresses the issue of side effects and addiction associated with opioids. Vertex already has suzetrigine set for a swift market launch if approved.

In addition to its promising CF therapies, Vertex is also targeting kidney diseases, such as APOL1-mediated kidney disease with Inaxaplin and IgA nephropathy with povetacicept. Lastly, Vertex is making headway in its mission to cure type 1 diabetes, with phase 3 testing underway for VX-880 and phase 1/2 studies for VX-264.

Vertex retains monopoly control over the underlying cause of CF with an expanding patient base and new treatments like ALYFTREK. Though VX-880 may have limited use due to immunosuppressant requirements, VX-264 bypasses this issue, making it a promising development.

With a forward earnings multiple of 25, Vertex’s stock price appears reasonably priced considering its significant growth prospects.

Given the current market uncertainty and Buffett's cautionary approach, it might be prudent for investors to consider diversifying their portfolios by looking into undervalued companies. For instance, BioNTech's pipeline, despite its significant potential, seems to be undervalued by the market with a low price-to-sales ratio. Similarly, Vertex Pharmaceuticals, with its promisingCF therapies and expansion into new areas like kidney diseases and type 1 diabetes, also appears reasonably priced with a forward earnings multiple of 25. These companies' financially sound structures could make them attractive investment opportunities during times of market volatility.

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