Thanks to progress in the race to develop an effective novel coronavirus vaccine, Novavax (NASDAQ:NVAX) assumed a higher profile in the competitive pharma world. That’s also true for volatile NVAX stock.
The Maryland-based vaccine development company has two Covid-19 vaccines undergoing trials. Its efforts are showing some promise and the market certainly took notice.
But shares of Novavax recently posted declines, triggering some noteworthy sales.
Is that a signal to other investors?
A Steep Climb and Fall
If you bought NVAX stock back when it was cheaper, say during the spring sell-off, it’s been pretty tempting to sell those sub-$10 shares. After all, the stock is trading around $113. No one will criticize you for taking that kind of profit.
As the saying goes, timing is everything. And NVAX investors who took their profits on Aug. 10, when shares were going for about $178, certainly had something to smile about.
A $65 drop in two weeks is eye-catching in its own right. Maybe ear-popping.
Many investors are so intent to catch a Covid-19 vaccine wave that the welcome mat is out for volatility.
Watch the Insiders
As investors watch for signs about a stock, one area that many monitor is what the company insiders are doing with their shares.
Insiders at Novavax are giving folks plenty to ponder.
Recent sales by company insiders totaled about $24 million – nearly 153,000 shares, according to one report.
The transactions occurred on Aug. 18 and involved board members and high-ranking executives.
In addition to the sales, the same executives also bought more shares of NVAX stock.
Investors on the outside often will speculate that when insiders sell their shares, it is an omen that the company’s performance peaked or bad news is on the horizon. This time, however, it appears these Novavax insiders took profits juts like a lot of other NVAX shareholders.
The purchases give others some assurance that there’s no trouble brewing.
But insider actions certainly are worth watching.
Opinions Vary on NVAX Stock
While several commentators still support buying NVAX stock, other suggestions are out there, too.
“What does that mean for investors today?” Thomas Niel writes in InvestorPlace. “In short, the easy money’s been made. Taking a wait-and-see approach may be the best move.”
This “tread carefully” advice really should be followed by all investors all of the time.
One sure way to do this is to spread the risk. Rather than focus your vaccine play on just one company, pick a handful to follow and place your bets when you believe the time is right.
For example, InvestorPlace’s Ian Cooper recently suggested targeting a trio of vaccine companies – Novavax, Moderna (NASDAQ:MRNA) and Inovio Pharmeuticals (NASDAQ:INO) – and making deliberate moves.
Cooper says to use any vaccine-related pullback – as seen with NVAX – as a prompt to buy.
“In my opinion, I’d use that recent weakness as a reason to buy, believing the NVAX stock could run to $200,” he said.
The Bottom Line on Novavax
The performance of NVAX stock has been something to watch.
Shares of the vaccine maker were trading for around $4.50 at the first of the year and pulled up to about $9 in March. Then, like a SpaceX rocket, the stock price soared to $189 this summer. Currently, the stock is trading around $113.
This sharp decline was in reaction to news about other Covid-19 vaccines, especially news from Russia, where officials are taking an ill-advised short-cut in their quest to be relevant in the vaccine chase.
News impacts can go both ways, however. The drop in Novavax stabilized after it was announced the company signed an agreement with the United Kingdom to produce 60 million doses of its Covid-19 vaccine candidate. That deal with the U.K. government is a reminder that investors need to look for developments beyond our borders.
If you bought NVAX when it was much lower, taking profit now is an attractive step.
And if you are considering buying Novavax, take a hard look at your tolerance for risk. This is one stock that doesn’t fit buy-and-hold investing but seems to be a decent bet in the vaccine sweepstakes.
Larry Sullivan is a veteran journalist in Florida who has covered banking and finance for several years. He is a former investing editor at U.S. News & World Report in Washington D.C. At this writing, Larry Sullivan does not own a position in any of the aforementioned securities.