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Across the United States, the COVID-19 pandemic has moved from being a blaring alarm on public health reports to more or less a fact of life... we know we're not getting rid of it, but vaccines, boosters, and less-lethal variants mean more and more Americans are choosing to return as much as possible to normal life.
That means a "new normal" for some of the healthcare and related retail stocks is coming on fast. Frankly, that new normal has meant investors have been disappointed in some of these companies' earnings lately. In other ways, the new normal means we can expect renewed strength in stocks that have traded sideways.
I've recommended some of these for subscribers in the past, and we've been fortunate to book some nice profits there.
Well, we're going to be taking some more, using an easy strategy designed to maximize profits.
Here are the tickers...
This Retail Pharmacy's Earnings Are Softening Up
On Thursday, Walgreens Boots Alliance Inc. (NASDAQ: WBA) reported third-quarter results that disappointed investors, and the stock was down more than 5% in early trading.
For the quarter, the company reported revenue of $32.6 billion, down 2% from the same period a year ago.
On the bottom line, earnings came in at $0.33 a share, which was down 76.08% from $1.38 a share last year.
The stock has already lost more than 26% from the beginning of 2022 as fears about COVID-19 waned and vaccine revenue dropped.
On top of vaccine revenue declining, the company also reached a $683 million deal last month to resolve claims related to the distribution of prescription opioid medications in Florida.
At this point, I think we could see additional softening in vaccination revenue and more potential opioid-related lawsuits on the horizon - neither of which are good for the company or its share price.
At this point, let's buy the WBA Aug. 19, 2022 $35/$32.5 put spread for $0.50 or less. Plan on exiting the WBA Aug. 19, 2022 $35/$32.5 put spread for a 125% profit or if shares of WBA close above $41.25.
That brings us to another familiar name from the pandemic...
This Drug Company Is on the Rise Again
On Thursday, Pfizer Inc. (NYSE: PFE) said it submitted a new application to the U.S. Food & Drug Administration seeking formal approval for the sale of its oral COVID-19 treatment, Paxlovid.
The application follows a new $3.2 billion agreement with the U.S. government for 105 million doses of its Comirnaty coronavirus vaccine at around $30 per dose. That's nearly 60% higher than the $19.50 price it originally negotiated with its partner, BioNTech SE ADR (NASDAQ: BNTX), in late 2020.
Unlike Walgreens (which actually has to administer vaccinations to generate revenue), Pfizer merely needs to create the vaccines and let the government buy them.
As a result, Pfizer now expects to post a record revenue of $100 billion in 2022 with gains led by Comirnaty sales, which are expected to top $32 billion.
After trading sideways for much of 2022, I like targeting PFE, right here.
At this point, I like buying the PFE July 29, 2022 $53/$54 call spread for $0.40 or less. Plan on exiting the position for a 100% profit or if PFE closes below $49.
Folks, the new normal will impact much more than pharma and retail stocks - it already has, in fact. The recession is already here, and in this new world order, anyone who doesn't have $1 million in their retirement account is going to be left holding the bag.
Investors need to be looking for strategies to help them get through these crises with their wealth intact.
That's why my colleague, Tim Melvin, and I have developed a survival strategy that will not only get you through the crush of inflation and supply chain chaos, but also has the potential to quadruple your money over the next five years.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.