Like the villain in a bad horror movie, the pandemic seems to never go away. Entering November, there was optimism as Covid-19 case counts were dropping with the Delta variant surge ending. Additionally, vaccination rates were trending higher, although at a slower than ideal pace.

Now, the situation has certainly taken a turn for the worse. The seven-day moving average of new cases was around 71,000 in early November. Currently, it’s at 119,000. One factor is that viruses spread more and faster in the winter months.  Further, measures of travel volume are at about 90% of 2019 levels, and people are taking less precaution in terms of masking and social distancing. It’s also clear that the vaccine is protecting against the worst effects of the virus but not necessarily in terms of spread.

Of course, the Omicron variant is another wildcard. So far, it’s seeming to be more contagious but less virulent which is a positive development. Additionally, the booster shot seems to provide protection. Given that case counts are likely to rise over the next month, investors should consider buying coronavirus stocks like Abbott Laboratories (ABT), Moderna (MRNA), and Pfizer (PFE).

Abbott Laboratories (ABT)

ABT is one of the largest medical device companies in the world. It operates through four segments: Established Pharmaceutical Products; Diagnostic Products; Nutritional Products; and Medical Devices. Some of its most well-known products include a line of rhythm management, electrophysiology, heart devices, diabetes care products, and neuromodulation devices. Some of its well-known brands include PediaSure, Ensure, FreeStyle, Glucerna, and various other brands.

ABT posted strong Q3 results that topped expectations on the top and bottom-line. The company’s net sales increased 23.4% to $10.93 billion, and EPS increased by 43% to $1.40 per EPS. For the full year, revenue is expected to grow 22% to $42.2 billion and EPS by 39%. 

ABT is one of the leading coronavirus testing stocks. Many experts rapid testing is necessary for life to go back to normal and allow schools and offices to reopen. In many European countries, a wide variety of tests are available at a low cost which means that outbreaks can be prevented and quickly isolated. It’s fair to expect that testing will improve as case counts move higher especially with people traveling and visiting family during the holiday season.

ABT’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. B-rated stocks have posted an average annual performance of 19.7%, beating the S&P 500’s average annual gain of 7.1%. Click here to see ABT’s complete POWR Ratings including component grades for categories like Growth and Value.

Moderna (MRNA)

MRNA is the leading company in the development of messenger RNA-based medicines and vaccines to treat infectious diseases, immuno-oncology, rare diseases, cardiovascular diseases, and auto-immune diseases. Of course, the company is known primarily for its COVID-19 vaccine sold under the brand name Spikevax.

Thus, it’s not surprising that MRNA is one of the best-performing stocks during the pandemic. Since its IPO, there has been significant hype and expectations of breakthrough treatments from mRNA-based drugs, but this was the first major application. The company should benefit from the increasing rate of vaccinations globally, and booster shots which are being recommended to combat the omicron strain. 

MRNA’s shares were slightly lower as the company missed estimates for earnings and revenue. The major factor was lower production than forecast. Still, the company’s results were quite impressive on a YoY basis as it went from losing money and having minimal revenue to $5 billion in revenue and $7.70 in EPS. 

The stock is also reasonably priced with a forward P/E of 10. In essence, the stock price fully reflects the coronavirus revenues which seems that it could become a seasonal vaccine. Additionally, the bigger potential for the stock is to develop effective vaccines for other diseases. 

MRNA’s POWR Ratings reflect this promising outlook as the stock is rated a B which equates to a Buy. The POWR Ratings assess stocks by 118 different factors, each with its weighting. It also provides component grades to give more insight.

Not surprisingly, MRNA has a B for Growth and A for Quality. This is consistent with its surge in earnings and revenue and its status as the leading mRNA, pharma stock. To see the complete POWR Ratings for MRNA, click here.

Pfizer(PFE)

PFE is one of the world’s leading pharmaceutical companies, and it’s played a major role in helping the world emerge from the pandemic with the Pfizer-BioNTech COVID-19 vaccine. The vaccine has been approved for use in children, and reports indicate that the booster shots protect against new variants. 

The recent rise in coronavirus cases and the emergence of new strains is a reminder that while the most acute phases of the pandemic are over, there will be challenges that linger which are opportunities for companies like Pfizer. 

In addition to the coronavirus vaccine, Pfizer has an impressive portfolio of products and a strong pipeline. It’s also shown the ability to develop new successful treatments and partner with smaller companies to help them bring their product through the regulatory process and to approval. 

Despite this upside, the stock is attractive from a valuation perspective with a forward P/E of 10.5 which is half of the S&P 500’s forward P/E of 21. Its recent earnings report showed revenue growth of 121% and earnings growth over 700%. Equally impressive is the company’s 27% profit margins. 

PFE’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system. A-rated stocks have posted an average annual performance of 30.7% which compares favorably to the S&P 500’s annual performance of 7.1%. For PFE’s complete POWR Ratings, click here.

PFE shares fell $0.06 (-0.12%) in after-hours trading Thursday. Year-to-date, PFE has gained 47.02%, versus a 25.95% rise in the benchmark S&P 500 index during the same period.

Jaimini Desai has been a financial writer and reporter for nearly a decade. His goal is to help readers identify risks and opportunities in the markets. He is the Chief Growth Strategist for StockNews.com and the editor of the POWR Growth and POWR Stocks Under $10 newsletters. Learn more about Jaimini’s background, along with links to his most recent articles.

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