Motley Fool: Investors’ cures may come from Moderna
Some investors might view biotech company Moderna (Nasdaq: MRNA) as a shooting star that shone brightly for a while, then flamed out. In 2022, it generated sales of nearly $19 billion, but it expects only $4 billion this year.
The real story for Moderna, though, is actually quite promising.
Moderna is at an inflection point. Its previous success stemmed entirely from its COVID-19 vaccine. That’s changing.
On May 31, the company won U.S. Food and Drug Administration approval for its respiratory syncytial virus (RSV) vaccine mResvia, ushering in a new era for Moderna. The messenger RNA (mRNA) pioneer plans to launch mResvia this fall, in time for the 2024-2025 RSV season.
The company has also announced positive results from a late-stage study of its influenza vaccine mRNA-1010 and plans to file for approvals this year. Later this year, Moderna expects to report results from a phase 3 study of its combination flu-COVID vaccine.
It has also been developing a vaccine targeting cytomegalovirus, the top infectious cause of birth defects in the U.S., and it has partnered on the development of anti-cancer vaccines.
The main knock against the stock is that it doesn’t seem inexpensive compared to its peers.
But given its impressive potential, risk-tolerant long-term investors may want to add some shares to their portfolios. (The Motley Fool recommends Moderna.)
Ask the Fool
Q. Where can teens learn about investing and money management? – P.K., Nampa, Idaho
A. You can be a great source of information and guidance for them if you talk frequently about your own financial habits, goals, challenges and successes.
If you invest, you might let them watch you do so – as you study and choose various investments, you might follow their progress together. Then perhaps you could help your teens start investing, too, via a custodial brokerage account.
There are lots of books that can help.
Depending on the teens’ ages and sophistication, consider “How to Money: Your Ultimate Visual Guide to the Basics of Finance” by Jean Chatzky and Kathryn Tuggle (Roaring Brook Press, $20), “Get a Financial Life: Personal Finance in Your Twenties and Thirties” by Beth Kobliner ($18, Simon & Schuster) and “I Will Teach You To Be Rich: No Guilt. No Excuses. No BS. Just a 6-week Program That Works” by Ramit Sethi ($17, Workman Publishing).
Q. What does “SWOT” mean in the financial world? – C.T., Wilder, Kentucky
A. The letters stand for strengths, weaknesses, opportunities and threats.
A SWOT analysis is a way to evaluate a company whose stock you might be considering for your portfolio. (It’s also a framework companies use to assess themselves as they work on their strategic planning, and it can be used in other ways, as well.)
As examples, a company’s strengths might include a strong brand and proprietary technology, and weaknesses might be a high debt load and high employee turnover.
Opportunities might include international expansion or a growing acceptance of sustainable products, while threats might include growing competition, the chance of increased regulation or inflation leading customers to spend less.
My dumbest investment
Tiny biotech stock IMV was my dumbest investment.
Penny pushers pumped it, and I really believed it was a good investment. It went up a fair amount, then fell to under a penny.
I should have sold my 1,000 shares that I’d purchased at $0.40 apiece – but I didn’t. The company has filed for bankruptcy protection.
Worst investment ever. – M.M., online
The Fool responds: We knew your story would end badly as soon as we saw the words “penny pushers.”
Penny stocks, those trading for less than around $5 per share, are notoriously volatile – and risky.
And “penny pushers” are those who “pump and dump”: They hype the stocks online (“about to strike oil!” “a cure for cancer around the corner!”) after they’ve bought some shares; then they sell their own shares quickly, triggering a fall.
Unfortunately, penny stocks entice many investors who get excited by the prospect of being able to buy lots of shares for a pittance.
You got 1,000 shares for only $400, for example. It’s easy to think that a price as low as $0.40 per share (or $0.05 or even $2) must be a bargain, but that’s not how stock valuation works.
Stocks with ultralow prices are often low-priced because their prices have fallen – for good reason. And penny stocks are typically tied to young, unproven businesses. It’s best to steer clear of them altogether.