Santa Claus will soon be on his way delivering presents to children around the world. But could the cheerful donor also bring something for investors? So called “Sinterklaas gatherings” could take place towards the end of the year.
Three Motley Fool contributors think they’ve identified great stocks that could be well positioned to benefit from a Christmas rally. This is why they chose AbVie (NYSE: ABBV), Novo Nordisk (NYSE: NVO)And Vertex Pharmaceutica (NASDAQ: VRTX).
David Jagielski (AbbVie): Heading into the end of the year, AbbVie is a growth stock that could be heading for a rally. The drugmaker has a lot of long-term potential and could be one of the better stocks to buy as the year comes to a close. The stock has had a tepid year, as shares are up just 11% (as of Monday’s close), which pales in comparison S&P500‘s more impressive rally of 27% year to date.
Investors turned bearish on the stock after the company announced that its schizophrenia drug emraclidine failed to meet its primary endpoint in Phase 2 trials, leading to a sell-off in the stock in November.
But that could present a great opportunity to buy the stock at a discount now, especially after encouraging news was reported from another trial. Earlier this month, the company announced positive results for tavapadone, which met both primary and secondary endpoints in a Phase 3 trial for the treatment of early Parkinson’s. The company will file a new drug application next year, which could lead to another approval related to the disease. In October, regulators granted approval for Vyalev, a treatment for advanced Parkinson’s disease.
Not every drug in AbbVie’s pipeline will be a success. But this is still a solid growth stock to own, and investors seem overly bearish on a disappointing test result for emraclidine. With over 90 compounds in the pipeline, there will be good and bad results along the way.
There is good value here for investors who are willing to be patient. Trading at just 15 times next year’s estimated forward earnings (based on analyst estimates), it may only be a matter of time before AbbVie’s stock takes off again.
Prosperity Junior Bakiny (Novo Nordisk): Several factors can trigger a year-end stock market rally, including optimism about the year ahead. It’s hard to predict which companies will benefit in 2025, but Novo Nordisk is a good choice for several reasons. Let’s consider two. First, while the drugmaker performed well in the first half of the year, it has struggled since then. In the past six months, Novo Nordisk shares are down 24%.