The market’s fleeting buying interest in drug manufacturers led to Pfizer (NYSE:PFE) and GlaxoSmithKline (NYSE:GSK) falling sharply. Pfizer’s under-performance is especially notable. After benefitting from positive media coverage for its partnership with BioNtech (NASDAQ:BNTX), markets sold shares of both companies.
What happened?
The buying and selling cycle in coronavirus vaccine companies continued throughout the year. BNTX and Moderna (NASDAQ:MRNA) tended to under-perform for months after posting positive news. And as markets anticipated strong sales for the vaccine, buyers would buy those vaccine suppliers.
Investors prefer to look at Pfizer’s overall business growth prospects and its suitability as an income investment instead. Similarly, GSK stock pays a healthy dividend yield, too. But as markets chase high-flying vaccine stocks that may offer bigger returns in the near term, such stocks will underperform.
Patient income investors should accumulate GSK and PFE stock at current levels. GSK is working with Vir Biotechnology (NASDAQ:VIR) to evaluate VIR-7831. This is a monoclonal antibody that has been shown to neutralize the virus in vivo and in vitro. If the companies post positive clinical results, buyers may take another look at GSK, especially when the stock is trading at a discount.
