Skip to main content

Sound Advice: May 4, 2022

Are Health Care Stocks on the Mend? 

The two sectors that have provided the highest returns in years past have been technology and health care.  We discussed technology last week.  This week it’s health care’s turn and even though the pandemic has brought a renewed focus on health care, most of these stocks have also experienced weakness this year.

Let’s focus on Johnson & Johnson, Pfizer, and Moderna since they have been the leaders in development of Covid vaccines.  Although all three have been in high gear turning out hundreds of millions of doses, their stock market performances have been anything but consistent.

Last year, it was estimated that Pfizer and Moderna had over $50 billion in sales from their Covid-19 vaccines.  Johnson & Johnson had $2.4 billion in Covid vaccine revenues.   

Given those numbers, one might well have expected a significant upsurge in the shares of these companies.  But the net result was anything but.  For 2022 to date, J&J shares have risen 5.4% in contrast to Pfizer and Moderna, which dropped 18% and 43%, respectively, since January 1st.

Even if we measure the shares’ market performance over the latest year, the returns have been less than stellar.  The best showing was from Pfizer shares, which climbed 25.2%.  J&J and Moderna were down 1.5% and 20.3%, respectively, over the same period.

For health care stocks generally, the picture has been no better.  The leading exchange-traded funds from iShares and SPDR, which hold wide baskets of these stocks, both lost ground over the period.  The good news, however, is that they did much better than tech stocks.

Over the last two decades, the average returns from tech stocks have been more than double those of health care stocks and more than triple that of the market generally.  But don’t forget, the gains from tech stocks came along with considerable fluctuation.  Increases from the health care stocks were well above those of the market generally with far less dramatic volatility.

N. Russell Wayne, CFP®

Sound Asset Management Inc.

Weston, CT  06883

203-222-9370

www.soundasset.com

www.soundasset.blogspot.com 

Any questions?  Please contact me at nrwayne@soundasset.com

Comments

Post a Comment

Popular posts from this blog

Sound Advice: January 3, 2025

2025 Market Forecasts: Stupidity Taken To An Extreme   If you know anything about stock market performance, you can only gag at the nonsense “esteemed forecasters” are now putting forth about the prospective path of stocks in the year ahead.   Our cousins in the UK would call this rubbish.   I would not be as kind. Leading the Ship of Fools is the forecast from the Chief Investment Strategist at Oppenheimer who is looking for a year-end 2025 level for the Standard & Poor’s Index of 7,100, a whopping 21% increase from the most recent standing.   Indeed, most of these folks are looking for double-digit gains.   Only two expect stocks to weaken. In the last 30 years, the market has risen by more than 20% only 15 times.   The exceptional span during that time was 1996-1999, which accounted for four of those jumps.   What followed in 2000 through 2002 was the polar opposite: 2000:      -9.1% 2001:     -11.9% ...
Post a Comment
Read more

Sound Advice: March 10, 2021

The ABCs of Stock Picking After decades of analyzing stocks (and funds) and investing for clients, I'm happy to share in plain English what's involved, what works, and what doesn't.  Keep in mind the reality that successful stock picking is an effort to maintain a good batting average. In baseball, a batting average of .300 or better is considered quite good.  With stock picking, you need to do better than .600, which means you have many more winners than losers. No one gets it right all of the time.  It's not even close.  Wall Street shops all have their recommended lists and the financial media regularly hawk 10 stocks to buy now. Following that road usually is a direct route to disaster.  Don't be tempted. Let's begin with the big picture: The stock market goes up and down over time, but the long-term trend is up.  When there's a rally under way, everyone feels like a genius.  When the market hits an air pocket, though, with few exception...
Post a Comment
Read more

Sound Advice: June 17, 2020

Rock and a Hard Place Regardless of your age, impressions from childhood linger.  As the first days of summer approach, we all remember the feeling that accompanied the end of a school year.  Yet as much as many of us would like to believe we again have the summertime freedom to do as we wish, the reality is quite the opposite. Although months of confinement and limitations on social interaction have increased our personal discomfort and severely impacted the business community, our current situation is not analogous to the end of any school year.  It’s quite the opposite. There is every reason to continue wearing face masks, social distancing, and avoiding close contact with others.  Nothing suggests that we can modify our behavior significantly or resume patterns of daily living we enjoyed only a few months ago. There are no meaningful advances in medical treatments.  At best, there are attempts to combine different approaches...
Post a Comment
Read more