Each quarter, investment firms managing more than $100 million must file a Form 13F with the Securities and Exchange Commission (SEC). These documents provide valuable insight into which stocks Wall Street’s smart money investors are buying and selling.
Last quarter, Ken Griffin’s Citadel and Israel Englander’s Millennium Management both bought Pfizer (NYSE:PFE) stock. Investing in Pfizer may seem like a questionable move, considering the stock is down nearly 30% over the past three years and the stock has underperformed woefully. S&P500 throughout 2024.
While Pfizer’s current picture looks a bit murky, there are a number of potential catalysts that, if done right, could spark a new wave of growth for the company. Could Griffin and Englander be on to something here? Let’s dig deeper and explore what an investment in Pfizer could look like.
It’s been a tough few years for Pfizer, but…
Pfizer is one of the most recognized pharmaceutical companies in the world. With such a rich history of developing blockbuster drugs in various parts of the healthcare landscape, what could be plaguing Pfizer stock right now?
For starters, the company’s main source of growth in recent years can be traced back to the COVID-19 pandemic. Pfizer was a leading force in the fight against COVID-19, and the company’s vaccines and other solutions drove record growth. While there is still a need for such drugs, demand for Pfizer’s COVID-19 treatments has shrunk as peak pandemic days appear to be in the rearview mirror.
Nevertheless, I see two potential areas that could contribute to a turnaround for Pfizer.
…could better days be ahead?
At the end of 2023, Pfizer completed a massive acquisition. The company bought an oncology company called Seagen for the not-so-low price tag of $43 billion. The acquisition helped strengthen Pfizer’s clinical pipeline and expand the company’s oncology-specific treatments.
According to Pfizer’s publications, the company hopes to have at least eight successful oncology drugs by 2030 – up from five today. If Pfizer executes on this vision, the company could generate billions of dollars in sales across a wide range of medicines, enabling it to achieve sustainable and robust growth.
Another lucrative opportunity for Pfizer right now is in the area of ​​weight loss. Glucagon-like peptide-1 (GLP-1) agonists such as Ozempic and Mounjaro are revolutionizing the diabetes and chronic weight management market. While Novo Nordisk And Eli Lilly are currently the two major forces in GLP-1, there are a number of other pharmaceutical companies that want to join in, including Pfizer.
Are Pfizer Stocks a Buy Now?
So the point is: Citadel and Millennium don’t have a crystal ball. While it’s interesting that both funds own shares of Pfizer during an otherwise tumultuous time in the company’s history, there’s no guarantee that these investments will prove wise.
I think a few things influence the moves of Citadel and Millennium. First, Pfizer is an existing position for both companies. I don’t see the recent purchases as anything other than simply adding to an existing allocation. Furthermore, given that Citadel and Millennium own large blocks of stock in a variety of industry sectors, Pfizer likely represents a hedge against other peers.
It is important to remember that initiatives involving Seagen will take years to materialize. Furthermore, there is no guarantee that Pfizer will ever succeed in the weight loss field. However, considering how far Pfizer’s stock has fallen, an argument can be made that investor expectations are so low that something catastrophic would have to happen for the stock price to rise even further.
While a number of questions linger in the background, investing in Pfizer at its low valuation could seem like a smart move in retrospect as the company capitalizes on new opportunities. To me, buying Pfizer stock now should be rooted in the company’s turnaround and your belief that the company can further diversify into oncology and possibly get involved in weight loss.
Should you invest €1,000 in Pfizer now?
Consider the following before buying shares in Pfizer:
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Adam Spatacco has no position in any of the stocks mentioned. The Motley Fool holds and recommends positions in Pfizer. The Motley Fool has a disclosure policy.
Do billionaires Israel Englander and Ken Griffin know anything? They all just bought this troubled value stock. was originally published by The Motley Fool
