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The 2 Best Pharma Stocks to Buy on Dips By StockNews

© Reuters. The 2 Best Pharma Stocks to Buy on Dips

Pharma companies with approved COVID-19 vaccines in their portfolios should grow significantly in the coming months, driven by large-scale vaccination programs around the globe. Thus, we think buying Johnson & Johnson (JNJ) and Pfizer (PFE) on every dip could be a fruitful strategy. Read on.The pharma industry has been in the limelight since the onset of the COVID-19 pandemic as several companies raced to develop an effective vaccine. With multiple vaccines currently available in the market, companies are now expanding their production capacities to meet the global demand because several countries, particularly developing ones, are still grappling with the new strains of the virus and their governments are placing a priority on vaccinating their populations.

A revival of economic and industrial activities and bullish markets have shifted investor focus from pharma companies, however. This is evidenced by the SPDR Biotech ETF’s (XBI) 5% decline year-to-date compared to the benchmark S&P 500’s 13.2% gains over this period.

Given the huge demand for COVID-19 vaccines, we think pharma companies Johnson & Johnson (JNJ) and Pfizer Inc. (NYSE:) should generate substantial revenues and earnings soon. Thus, we think the industry’s current dip provides a perfect opportunity to invest in these stocks.

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