The Motley Fool: Invest in Vaccine Makers?
Q: I keep reading about Moderna and other companies working on promising COVID-19 vaccines. Is it worth investing in them? — E.P., Cleveland
A: Shares of Moderna and other vaccine-related companies have soared in recent months, some more than doubling or tripling in value. That means that expectations of successful vaccines are already baked into their prices. Some or all may continue to rise, but that’s far from guaranteed, since much uncertainty remains.
For example, which companies will end up with successful vaccines? Which vaccines will be most widely distributed? Which ones will generate the most profit for their makers? If you’re thinking about investing in one of these companies, you should look beyond vaccines alone. Consider how much cash and debt they have — can they stay afloat a long time? Are they generating profits now, and are those likely to grow? Do they have a pipeline of other promising treatments in development, and how close to getting approved are those? Remember that if any vaccine being developed fails, its company’s stock is likely to fall, possibly sharply.
Vaccine makers can be risky investments. Digging into other health care stocks could turn up other exciting portfolio candidates that are more undervalued.
Q: What good financial planning books do you recommend? — C.W., Cerritos, California
A: Here are a few: “Get a Financial Life: Personal Finance in Your Twenties and Thirties” by Beth Kobliner (Simon & Schuster, $17), “Managing Your Money All-In-One For Dummies” (For Dummies, $30) and “Your Complete Guide to a Successful and Secure Retirement” by Larry Swedroe and Kevin Grogan (Harriman House, $19).
You might also want to consult a financial adviser. Learn more about that at NAPFA.org and at SEC.gov/investor/brokers.htm.