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Should You Invest in Moderna's (NASDAQ: MRNA) COVID-19 Vaccine?

Written by Jason Stutman
Posted May 23, 2020

Dear Reader,

Earlier this week, the world caught its first glimpse of positive data from a clinical trial for the development of a COVID-19 vaccine, and the market was ecstatic.

On Monday, Moderna Inc. (NASDAQ: MRNA) reported positive Phase I data for its COVID-19 vaccine candidate mRNA-1273. All eight participants in the study generated antibody markers comparable to those seen in patients who have recovered from the disease.

The news was enough to lift U.S. stocks across the board, as investors reveled in the possibility that we just might innovate our way out of this mess. The Dow climbed 900 points while a Wall Street Journal headline read, “U.S. Stocks Surge as Hopes for Coronavirus Vaccine Build.”

Moderna, unsurprisingly, rallied as well. It shot up from around $65 to $85 on the day. The company’s market cap reached nearly ~$30 billion, briefly landing Moderna in the top 25 largest biotech companies in the world. 

Moderna’s ascension this year has been nothing short of incredible for shareholders. In January, the stock was trading at less than $20 a share, working out to a 400%+ return through Monday’s data reveal. That return, mind you, comes during a period where the Dow has shed 4,500 points.

Most investors, of course, had never heard of Moderna before this week, let alone before the coronavirus outbreak. Picking out this obscure biotech would have been like finding a needle in a haystack for the average Joe or Jane on Main Street.

Many of our readers, though, were given a heads up on Moderna much earlier on in the development cycle, and on multiple occasions.

Members of our investment advisory IPO Authority, for instance, were told about Moderna when it first hit the public market in late 2018. Our own Monica Savaglia opined at the time that it could be the biggest biotech IPO in history. 

And earlier this year, when global lockdowns were just taking hold, I wrote about Moderna to members of our biotech trading service Topline Trader, saying that it offered “the most upside” of all available biotech companies developing a coronavirus vaccine. 

Two weeks ago, in Topline Trader, I even touted the distinct advantages of nucleic acid vaccines, like the kind that Moderna is developing, over competing categories such as whole virus vaccines and recombinant protein subunit vaccines. I plainly said at the time that when ranking vaccine types for SARS-CoV-2  “in terms of promise and efficacy, nucleic acid vaccines would sit on top.”

Now, Moderna’s management is making the rounds on national television outlets like CNBC, celebrating the recent success of its ribonucleic acid vaccine. The company is suddenly the talk of the town but for the showmen on TV, we all know that hindsight is 20/20. At this point, it’s most likely too late to start investing in a company like Moderna because the hype is overpriced.

My point is, the mainstream media is effectively useless when it comes to finding highly profitable investment ideas. It’ll always be there to entertain you vicariously with opportunities you’ve already missed, but it’ll never be there to let you in on which stocks are about to blow up next.

The reason for this is nothing nefarious, per se, but rather the inevitable result of incentive. Mainstream media outlets aren’t paid by investors to provide good advice; they’re paid by advertisers to bring eyes to the screen. That’s their bottom line so that’s what you’re always going to get. 

We, of course, operate on an entirely different business model, one that isn’t reliant on outside ad dollars. Instead, we’re beholden to our readers directly, so we’re highly incentivized to provide actionable and profitable investment advice.

To be clear, this doesn’t make any of our opinions infallible, nor does it make any of our stock picks risk-free, but it immediately aligns our interests with our readers in a way you won’t find in your typical news source.

To build on this incentive even further, we have a six-month, money-back guarantee on most of our investment advisory services, so if you’re not getting good advice, you can tell us to shove it. It’s as simple as that.

So, if what you’re really looking for is a heads up on the next Moderna, my advice is to turn off the TV and cancel your subscription to The New York Times if you have one. Check out some of our premium publications at no risk here.

And if you’re looking for biotech stocks in particular, I invite you to join us at Topline Trader. You can learn more about the service here.

Until next time,

  JS Sig

Jason Stutman

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