Using a momentum investing strategy is one that has proven quite successful for investors in the past few months. Often stocks move in a particular direction for a period of time due to some type of catalyst. Other times it’s a seasonal effect that can drive stocks up or down. And sometimes it can be because of a new product launch or acquisition.
In this article, I will be covering three stocks that have done well this year and momentum upward should continue in July. The first company is a software company benefiting from the corona economy, and the other two stocks are biotech companies with potential solutions to the pandemic.
DocuSign, Inc. (DOCU)
DOCU provides an e-signature solution that enables businesses to prepare, execute, and act on agreements digitally. Electronic signatures are becoming the new way to sign contracts, forms, and other documents. DOCU is the king of electronic signatures. The company has a 57.8% market share in the market, with more than 600,000 paying customers and hundreds of millions of individual users.
Businesses were already started to migrate paper transactions to digital before the pandemic, as it provides cost savings, convenience, and security benefits. The pandemic is only speeding up that switch. DOCU recently launched Agreement Cloud, a suite of applications to cover every aspect of a deal.
Management is confident that its offerings provide time and cost savings, which results in customers expanding their adoption of the company’s services. They anticipate between $316 million and $320 million in Q2. DOCU has a Strong Buy rating in our POWR Ratings service. It is ranked #4 out of 81 stocks in the Software-Application industry.
DOCU is a crucial provider in a rapidly expanding industry. It is well-positioned to deliver strong returns for investors. The stock is up 131.64% for the year.
Novavax, Inc. (NVAX)
NVAX, a late-stage biotechnology company, focuses on the discovery, development, and commercialization of vaccines to prevent serious infectious diseases. The company has been on the minds of traders and investors due to a promising vaccine for COVID-19 called NVX-CoV2372. Their research has made Wall Street very interested in this company and their possible vaccine. NVAX is talking about manufacturing a billion doses.
A vaccine for COVID is not the only promising drug in its stable. Their flu vaccine, NanoFlu, has been proven superior to the market leader, Sanofi’s (SNY) Fluzone Quadrivalent, in numerous clinical trials. The vaccine has been particularly strong against mutating viruses. That is why many analysts are so bullish on this stock. NVAX will be filing for FDA approval for NanoFlu later this year.
NVAX has ample resources to develop and market a COVID-19 vaccine. The company recently announced that the Coalition for Epidemic Preparedness Innovations would invest as much as $384 million in their research. The stock is up 2,000.75% for the year. NVAX, which has a Strong Buy rating in our POWR Rating service, is ranked #15 out of 336 stocks in the Biotech industry.
NVAX is as far as any company in developing a COVID vaccine. This is a must-watch stock as the pandemic continues.
Inovio Pharmaceuticals, Inc. (INO)
Another biotech stock on my list is INO. The company focuses on the discovery, development, and commercialization of DNA medicines to treat, cure, and protect people from diseases associated with human papillomavirus (HPV), cancer, and infectious diseases. INO has similarities to NVAX, as it is also a contender for a COVID vaccine. INO came up with a potential solution using its proprietary technology to analyze the coronavirus’s genetic profile.
INO, like NVAX, is also well funded. The Defense Department signed a $71 million deal with the company to manufacture and scale up its needle-less vaccine delivery devices. Any effort to scale up a potential vaccine is vital to national security. Members of our armed forces are on the front lines of this pandemic. The company is known for quickly creating potential new DNA vaccines.
INO also announced successful trials of its DNA therapy that treats the deadly brain cancer glioblastoma multiforme. Other drugs in clinical trials include a DNA treatment for HPV-caused cancers and prostate cancer. The stock is up 830.30% for the year. INO has a Strong Buy rating in our POWR Rating service, and it is ranked #14 out of 336 stocks in the Biotech industry.
INO is another must watch stock as the world holds out hope for a COVID vaccine.
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NVAX shares . Year-to-date, NVAX has gained 2,000.75%, versus a -4.43% rise in the benchmark S&P 500 index during the same period.
About the Author: David Cohne
David Cohne has 20 years of experience as an investment analyst and writer. Prior to StockNews, David spent eleven years as a Consultant providing outsourced investment research and content to financial services companies, hedge funds, and online publications. David enjoys researching and writing about stocks and the markets. He takes a fundamental quantitative approach in evaluating stocks for readers. More...
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