Not every company is at risk.
Not every company is at risk.
Stocks continue to test record highs. But every bullish step forward pushes the market closer to a correction, if not a full-blown bear market.
That's the interpretation of the so-called Warren Buffett indicator at this time, anyway. The ratio comparing the total market cap of the U.S. stock market (as measured by the combined value of the Wilshire 5000's companies) to the nation's gross domestic product, or GDP, currently stands at a record high of 237.5%. It's a sign that stocks are dangerously overvalued.
For perspective, this indicator only peaked at 138.5% at the height of the dot-com mania in early 2000, and barely and briefly eclipsed 100% in 2007, right before the subprime mortgage meltdown upended the rest of the domestic economy. Warren Buffett also recently commented in an interview with CNBC that "prices for an awful lot of things will look very silly." Investors have good reason to be concerned.
Still, the backdrop doesn't necessarily dictate whether or not you invest, but how you invest. There are always stocks worth owning. It's just a matter of figuring out which names those are, given the environment at the time. To this end, here's a closer look at three stocks to consider buying now regardless of Buffett's warning.
It's no secret why Pfizer (PFE +0.48%) shares have struggled since peaking in late 2021. The wind-down of the COVID-19 pandemic simply ended overwhelming demand for its Paxlovid treatment, as well as for its vaccine co-developed with BioNTech. That year's revenue of just over $100 billion has since fallen back to its pre-pandemic annual norm of around $60 billion, with the impending expiration of its patents on Eliquis, Ibrance, Xtandi, and its pneumonia vaccine Prevnar 13 threatening roughly one-third of its current drug portfolio and weighing on the stock in the meantime.
Investors may be so fixated on Pfizer's past, however, that they're ignoring its promising future.
Granted, the crux of this bright future is still well down the road. Although the pharmaceutical company hopes to eventually have at least eight blockbuster oncology drugs in its portfolio, doubling the number of cancer patients it's currently serving, the drugmaker also knows this effort isn't likely to reach its full revenue stride until 2030. That's quite a wait, even for the most patient of shareholders.
Just understand that we'll see incremental progress along the way that could provide some degree of bullish tailwind for the stock. For instance, although it's still a relatively small profit center, Q2's $667 million in sales of cancer-fighting Padcev, which Pfizer added to its portfolio with its 2023 acquisition of Seagen, is a 23% improvement on this drug's revenue from a year earlier. Meanwhile, the very same drug is currently being tested in a couple of other clinical trials.
$29.58+$0.14 (+0.48%)
Averytin News Financial update.