Catch The Rally In Swine Flu Stocks
The Dynamic Wealth Report
September 3, 2009
Swine Flu Part Deux
by Robert Morris, Editor
The swine flu, or H1N1 virus, is making headlines again. With kids
heading back to school, health officials are worried about another
outbreak.
H1N1 first appeared last April in Mexico. Since then, it’s grown into a
full blown global pandemic.
The World Health Organization (WHO) says H1N1 has spread to 170
countries… over 200,000 people have become infected… and, at least 2,185
people have died from the virus.
Health officials were hoping the virus would fade away during the
summer. Most viruses tend to do just that. But, H1N1 is proving to be
remarkably resilient. It not only survived the summer, it continued
spreading around the world.
Now, it looks like H1N1 is gearing up for a potentially huge second
wave.
The WHO is warning that the number of H1N1 cases worldwide are about to
explode. They predict most countries will see a doubling of cases every
three to four days until peak transmission levels are reached.
Not to be outdone, the Obama administration just made its own dire
predictions for H1N1.
They said half of all Americans could eventually become infected with
the virus. Some 1.8 million could need hospitalization. And, deaths from
H1N1 could number 30,000 to 90,000 people (about double the number of
deaths from seasonal flu).
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So far, H1N1 has been relatively mild.
Most people who get infected have regular flu-like symptoms and
eventually recover. However, severe complications and deaths have
occurred in pregnant women, young children, and people with underlying
health conditions.
While the death toll has been low so far, many disease experts are
concerned H1N1 could eventually mutate into a deadlier strain. And,
given the speed at which the virus spreads, a deadlier strain could
cause mass devastation.
The focus right now is on producing vaccines to immunize the public
against H1N1. A vaccine is expected to be widely available in the U.S.
by mid-October.
Back in April, I recommended several stocks that I believed would
benefit from the fight against H1N1. (Read
The Swine Flu – A Secret
Bio-Weapon? for the details.)
I don’t mean to brag, but you’d have made good money following my
recommendations.
Surgical mask makers 3M (MMM) and Kimberly Clark (KMB) are up 23% and
17% respectively.
Makers of the anti-viral drug, Tamiflu, are seeing mixed performance.
Gilead Sciences (GILD) is down 4%, while partner
Roche Holdings (RHBBY)
is up 24%. GlaxoSmithKline (GSK), the maker of anti-viral drug, Relenza,
has jumped 27%.
The big vaccine makers are outperforming across the board. Astra Zeneca
(AZN) is up 26%, Novartis (NVS) is up 22%, and Baxter International
(BAX) is up 19%.
But, the big winner was tiny penny stock, Novavax (NVAX).
NVAX is up a whopping 119%!
They’re developing a three-in-one vaccine against swine flu, Hong Kong
flu, and a strain of influenza B. Results from a recent mid-stage
clinical trial show the vaccine is effective without any serious side
effects.
All of the stocks mentioned above are strongly outperforming the market
since I recommended them. The Dow Jones Industrials and the S&P 500 are
both up just slightly more than 13% over the same time period.
Here’s what I see going forward.
For the larger drug companies, revenue from H1N1 vaccines will be a drop
in the bucket. They’re already selling many drugs and other health care
products.
The big money is going to be made in the smaller, more speculative
companies like NVAX. Here are a few other small company stocks likely to
benefit from H1N1.
Alpha Pro Tech (APT) is tripling production of its respirator masks for
the flu season. They’re expecting a surge in demand due to H1N1.
Sinovac Biotech (SVA) just received approval from the Chinese government
to produce its H1N1 vaccine. The company expects to begin production
next week.
Finally, a truly speculative play is Inovio Biomedical (INO).
They’re using DNA to develop a universal vaccine that works against all
flu strains. Now, INO is nowhere close to having a product ready for
this flu season. But, the stock could rocket higher in a broad swine flu
rally.
I expect all of these stocks to continue outperforming the market. And,
any news about H1N1 spreading or becoming more deadly should certainly
cause these stocks to jump. Take a look at a few of these for your own
portfolio.
Editor’s Note: I just recommended a terrific Chinese swine flu stock in
my advisory service,
The Penny Speculator. Huge demand for this
company’s products is sending their revenue and earnings soaring. If you
haven’t subscribed yet, you can learn more
here.
Investors are flocking into gold mining stocks with a vengeance.
Yesterday, the Market Vectors Gold Miners ETF (GDX) jumped 9.5%.
Investors are buying up gold mining stocks as a hedge against a
potential decline in the stock market. The gold miners will often hold
their value, or even move higher, during broader market corrections.
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