These 4 pharma stocks are for bulls and bears alike.

The bulls among you, who believe we have found bottom, will appreciate the continued solid growth of these drug companies. Plus some of them provide quite impressive dividend income to bolster the total return.

The bears out there, who are still concerned that bottom has not yet been found, will appreciate the safety in drug stocks. Yes, pharma is a historically conservative group to hold onto even during bear markets and recessions. But that is especially true in this case where the catalyst for the decline is a health crisis with the solutions likely to emerge from one of these companies.

In reviewing the medicine cabinet full of pharmaceutical choices, I believe these 4 are the best ones to consider at this time: Abbott Laboratories (ABT), Proteostasis Therapeutics (PTI), Sanofi (SNY) and Zoetis (ZTS)

Here is why…

Abbott Laboratories (ABT)

Healthcare products represent a safe haven of sorts amidst economic turmoil, especially for those looking for a defensive investing strategy with minimal risk.  ABT fits this investing strategy which explains why shares are doing so well this year leading to a POWR Rating of A (Strong Buy).

Abbott develops and manufactures a wide array of healthcare products in four primary segments of nutrition, vascular, diagnostic and pharmaceutical. These are the kinds of products that will be in demand no matter how bad the economy gets.

ABT recently joined forces with Johnson & Johnson to create a coronavirus vaccine.  If approved, this vaccine would likely to hit the market early next year thanks to the federal government’s billion dollar investment in its development.  It is quite possible human testing of the COVID-19 vaccine will launch in September of this year.  Furthermore, ABT’s rapid coronavirus test takes five minutes or less to determine if an individual has the virus.  This good news motivated investors to scoop up ABT stock in late March, bumping it up from the low $60s to $86.  If ABT’s efforts to defeat the coronavirus turn out to be a game-changer, the stock will likely shoot through its 52-week high of $92.45. And even higher given some of the loftier price targets for ABT bandied about by Wall Street pros.

Zoetis (ZTS)

If there is one thing people are willing to spend on, no matter how bad the economy gets, it is their pets. (I can attest to that first hand with a house filled with 2 kids and 3 dogs. Often I believe the dogs eat better food than I do…but I digress).

ZTS stands to benefit from humanity’s fierce allegiance to its furry friends.  The company creates and sells pet medicines, vaccines and other animal-related products.  Aside from dogs and cats, ZTS also makes products for horses, sheep, cattle, fish and several other animals.

Do not be dismayed by ZTS’ drop to $92 in late March.  The stock bounced right back up in the ensuring weeks.  ZTS now trades at $128 and change.  TipRanks’ average analyst price target of $139.43 is slightly below the stock’s 52-week high of $146.26.  In short, this is a value stock unlikely to take a major hit in our increasingly uncertain economy.  Furthermore, the fact that ZTS recently acquired a cloud-based platform bodes well for a potential digital pivot and future growth.

Sanofi (SNY)

Though plenty of investors are patiently waiting on the sidelines, a growing number are willing to put their hard-earned money into companies working hard to win the battle against coronavirus.  SNY is one of those enterprises. The company is going all-out in its attempt to develop a coronavirus vaccine.  SNY partnered with Translate Bio (TBIO) to develop the vaccine.

It appears as though SNY bottomed out at $38 on March 20.  The stock has since ticked upward to $45.  If SNY makes progress in the fight against COVID-19, SNY’s stock could easily break through its 52-week high of $51.84.  The fact that SNY is capable of mass producing hydroxychloroquine, a potential coronavirus treatment touted by the Trump administration, is reason enough to justify TipRanks’ average analyst price target of $58.

Proteostasis Therapeutics (PTI)

And now for the most speculative of our 4 pharma stocks, PTI. The company develops investigational drugs with the hope of obtaining approval from the United States Food and Drug Administration (FDA).  The company’s overarching aim is to discover and develop new therapeutics to treat disease spurred by an imbalanced Proteostasis Network.

PTI has embraced the difficult challenge of developing cystic fibrosis drugs and is currently  conducting trials on drugs to treat patients saddled by cystic fibrosis with specific mutations.  PTI drugs are also in development for those suffering from Alzheimer’s disease, Huntington’s disease, and Parkinson’s disease.

Though PTI released positive data from its phase 2 clinical trial tests this past winter, investors were not receptive to the move, sending the stock down from $4.25 to $1.25.  At the moment, PTI trades at $1.22.  If PTI is able to raise more funding without significantly diluting existing shareholders, there is a good chance the company will secure the portion of the market neglected by competitors such as Vertex.  The bottom line is protein processing and manipulation will prove fundamental to the medical industry’s progression in years to come. After all, protein is the building block of life.  This is precisely why PTI is worth long-term consideration. The company has a #2 Zacks rank with an expected earnings growth rate in excess of 25% for the year.  Furthermore, TipRanks’ PTI analyst price target is $5.33.  PTI clearly has significant upside.

Want more great stock picks? Then check out these additional resources:

Is This a “Suckers Rally”?

Free Access Pass to Wealth365 Online Summit– Join many of the world’s top investors to learn strategies to not just survive, but actually thrive in the midst of this bear market.

Reitmeister Total Return portfolio – Learn Steve Reitmeister’s strategies and current picks that work in bull and bear markets alike.

ABT shares were unchanged in after-hours trading Friday. Year-to-date, ABT has declined -0.52%, versus a -13.06% rise in the benchmark S&P 500 index during the same period.

About the Author: Steve Reitmeister

Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks. More...

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