Jim Cramer recently told investors not to buy shares of Regeneron Pharmaceuticals Inc (NASDAQ:REGN) just because U.S. President Donald Trump took the company’s antibody cocktail to help recover from COVID-19 and said that it’s effective. If that’s true, investors should do their own analysis of a stock and not get caught up in the hype surrounding a news event.
Earlier this year there was a lot of hype surrounding Gilead Sciences (NASDAQ:GILD) and its remdesivir drug, which many were hoping would be effective in treating patients with COVID-19. However, Gilead’s stock has sharply declined in recent months and it’s now in negative territory for the year. Hype can be a dangerous reason to invest in a company, and Regeneron’s no exception.
But that doesn’t mean Regeneron’s a bad stock to buy. There could be lots of potential for its antibody cocktail. The company recently submitted a request to the Food and Drug Administration to grant it an Emergency Use Authorization (EUA) for the treatment. With an EUA, there could be much more widespread use of the cocktail and if it’s proven to be effective in helping patients with COVID-19, it could indeed send the stock skyrocketing.
Year to date, Regeneron’s stock is up around 60%, well above the S&P 500’s 8% returns. The company’s business looks good with dozens of products in its pipeline and several of them in Phase 3 trials. Regeneron’s also been consistently profitable, earning profit margins north of 30% in each of its last four quarterly results. With a forward price-to-earnings multiple of 15, the stock isn’t all that expensive, either.
Overall, there are many good reasons to be bullish on Regeneron right now, and it could be a great stock to add to your portfolio today.