Why Did Cathie Wood Buy Pfizer?

While Cathie Wood has been in the financial investment game since the 1970s, it wasn’t until 2014 with the founding of ARK Invest that her journey to becoming a household name began in earnest.

Wood’s bold investments and striking claims about the New York Stock Exchange’s most controversial stocks have cemented her as one of Wall Street’s most interesting voices.

Given the popularity of Pfizer vaccine, it’s only natural to wonder what her thinking was behind the purchase of PFE shares. With the recent FDA authorization of Pfizer’s COVID-19 vaccine and subsequent dip in the company’s price per share, the question remains: Why did Cathie Wood buy Pfizer, and what does her purchase mean for the future of PFE share price?

Does ARKK Own Pfizer?

Cathie Wood’s ARK Invest does own Pfizer stock.

On August 24th of 2021, the day after the FDA granted approval for Pfizer’s COVID-19 vaccine (now marketed under the name Comirnaty), ARKK purchased a big chunk of shares in the company.

Pfizer’s price per share on the 24th was down compared to the day before, and has since continued to fall even lower since then. Today, it sits below $46 per share — nearly five dollars below the company’s previous high of $50.42 hit on August 17th of 2021.

The argument in favor of Pfizer is that COVID is not going away anytime soon and a stream of booster jabs will be required that in turn will sustain higher Pfizer revenues and profits.

How Much Pfizer Does Cathie Wood Own?

To be more specific, Cathie Wood and ARK Invest purchased 158,788 shares of Pfizer on August 18th and an additional 258,390 shares of Pfizer (PFE) on August 24th.

This date represents one of several times Pfizer stock has taken a slight dip in recent months, but the dip on the 24th sets itself apart from other dips by happening to fall the day after the FDA granted the company’s COVID-19 vaccine approval.

Wood then went back and purchased more Pfizer on August 31st, buying up an additional 91,400 more shares in Pfizer.

This indicates that, in her view, even though the stock has been dipping lower and lower since being granted approval, the future still looks bright for the biopharmaceutical company.

All in all, it will be interesting to see how long Wood and ARK Invest hold onto these shares in Pfizer — Wood is known for the stocks she buys, but it’s just as telling when she sheds a stock, too.

What Did Cathie Wood Pay For Pfizer?

Pfizer stock was trading for $49.31 on August 18th, down from the company’s previous high the day before of $50.42. As such, Cathie Wood’s nearly 159 thousand shares came out to cost around $7.8 million in total.

On August 24th, by the time the New York Stock Exchange closed, Pfizer stock had fallen to a price per share of $48.38. Multiply this by the 258,000+ shares ARKK purchased on that date, and the cost comes out to be worth over $12.5 million.

On the 31st, Wood’s additional 91,400 shares at a price of around $46 a share came out to be around $4.2 million total.

Taking all three of these purchases and combining them into a grand total of over 500 thousand shares, Wood and ARK Invest spent nearly $25 million on Pfizer shares in the last couple weeks of August alone.

Why Did Cathie Wood Buy Pfizer Stock?

There are all sorts of reasons why Cathie Wood would be feeling so bullish on Pfizer stock as of late: Not only was the company the first to have its COVID-19 vaccine receive emergency use authorization for the general public, the company was also the first to get full-on FDA approval for its vaccine.

Combine this with the company’s efforts to go beyond vaccination and develop a Coronavirus treatment for the long-term, and Pfizer is clearly demonstrating a willingness to invest in COVID-19 prevention as well as treatment.

This could bode very well for the company and its stock in the years to come. It’s easy to see why, when the stock dips, Wood has been eager to buy more shares.

Is Pfizer Stock A Good Investment?

The company’s success with the COVID-19 vaccine and its willingness to develop a COVID-19 treatment for those experiencing long-term symptoms after infection are indications that Pfizer will remain a sound investment for both ARKK and retail investors and traders alike.

With medical experts forecasting yearly COVID-19 vaccine boosters in the future, the billions Pfizer has already earned from these first months of vaccinations alone, and its highly diversified existing revenue streams, it seems safe to say Pfizer stock is a good investment for the foreseeable future.

From a discounted cash flow forecast analysis perspective, the fair market value or intrinsic price per share for Pfizer sits at $44 per share, suggesting it’s fairly valued at this point in time.

The Bottom Line: If Cathie Wood Bought Pfizer, Should You?

Given Pfizer’s success throughout the Coronavirus pandemic and the signs the company has shown for continued success in combatting COVID-19 in the future, it seems that Cathie Wood’s Pfizer purchase would also be a wise one for retail investors and traders, too.

Cathie has a tendency to identify major trends that are not yet popular. For Pfizer, the possible trend she’s uncovered is that COVID is not going away anytime soon, contrary to the hopes of many analysts and optimists. If this is true then analysts are likely significantly under-representing Pfizer revenues for the foreseesable future. When analysts en masse come to that conclusion the odds are that Pfizer share price will be significantly higher.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.