Ritholtz Wealth Management’s Josh Brown believes the best opportunity in the market right now is in a pharmaceutical stock that’s trading at the same price it was at more than 10 years ago.
What To Know: Tuesday on CNBC’s “Fast Money Halftime Report,” Brown made the case for buying Pfizer Inc PFE stock at current levels.
“This is very far away from what people are doing. This stock is on the 52-week low list. It’s actually at an 11-year low. We haven’t seen it trade at these prices since December of 2013,” Brown said.
“There’s just no great near-term catalyst for this stock, and as a result, people are coming out of it and looking for other things to do that might be more rewarding in the shorter-term.”
That’s the perfect setup for Brown, who increased his position by 50% on Tuesday and plans to hold Pfizer shares for the long haul. He’s not looking for a short-term pop for a quick profit. He plans to be an investor in Pfizer, he said.
“I don’t even know if I’m done buying it yet,” Brown said.
Brown tends to buy stocks when they are closer to 52-week highs and showing signs of strength, but Pfizer is a “special situation,” he said.
Pfizer went all-in on vaccines during the COVID-19 pandemic and is still recovering from slowing vaccine demand. That helps explain why the stock is in a 60% drawdown and has a dividend yield of 6.5%, Brown said. However, Pfizer’s recent acquisition of Seagen could act as a turning point for the company, he suggested.
“They made an acquisition of Seagen, which I think is going to have huge potential in the coming years for oncology drugs,” Brown said.
“This company has been around for 175 years. They’ve had other issues like this … They always find a way to rebuild revenue growth and reorient the company. I don’t think this time will be any different so I am a buyer under $30 and we’ll see what happens in the coming years.”
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PFE Price Action: Pfizer shares are down approximately 35% over a one-year period. The stock was up 1.04% at $26.16 at the time of publication Tuesday, according to Biedex Markets Pro.
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