Moderna (MRNA 1.69%), ExxonMobil (XOM -2.78%), and Teladoc Health (TDOC -2.40%) are among three of the best stocks to buy right now due to their potential to explode to the upside. There has never been a better time to get into the stock market. Even after a catastrophic market sell-off in March, the S&P 500 index has recouped all of its losses and is now up over 14% year to date.
It isn't easy to find companies that can best this kind of performance. Today, let's look at why a coronavirus vaccine producer, an oil giant, and a premium telemedicine company all have the potential to make investors richer than what the market will reward.
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1. Moderna
Last month, Moderna disclosed that its experimental coronavirus vaccine mRNA-1273 is 94.1% effective at preventing COVID-19 infection and has 100% efficacy with regards to stopping severe cases of COVID-19 from developing. That is astonishingly good news, and is just about what we need to end the pandemic. Right now, the development-stage biotech is trading at record highs with its market capitalization hovering around $60 billion. However, there is plenty of room for shares to run even higher.
Moreover, the candidate achieved such efficacy without compromising safety. To date, there have been no serious adverse events reported in its phase 3 efficacy trials. Long-term safety data coming from phase 1 and phase 2 participants have also been very favorable.
Moderna has signed deals with countries across the developed world to provide over 330 million doses of mRNA-1273. The candidate is currently awaiting an Emergency Use Authorization (EUA) by the U.S. Food and Drug Administration (FDA). A meeting to review its safety and efficacy is scheduled for Dec. 17.
Next year, Moderna expects to produce between 500 million to 1 billion doses of mRNA-1273, which could translate to tens of billions in potential revenue. More critically, its success in developing a coronavirus vaccine candidate serves to validate the concept behind all of its messenger RNA (mRNA) programs. The company has over 20 candidates in development and could generate billions more in revenue on top of what mRNA-1273 has to offer.
The company currently has over $4 billion in cash on its balance sheet and no debt whatsoever. Due to the magnitude of the coronavirus market opportunity, Moderna is arguably one of the best biotech stocks to choose from. Shares are up by over 680% year to date, including a 113% gain in November alone.
2. ExxonMobil
Fortune has not been kind to ExxonMobil stock for much of 2020. Year to date, its stock has lost nearly 40% of its value as the COVID-19 pandemic shut down the global economy and sent oil prices around the world into a free fall.
In response, the company had to lay off close to 15% of its workforce and cut $6 billion in capital expenditures. For investors who want to buy the dip, however, now is the optimal time to do so.
ExxonMobil's stock opportunity lies not in its past financials or events but in the eventual finale to the pandemic. There are now multiple coronavirus vaccine candidates that have achieved success in phase 3, including the aforementioned mRNA-1273. Once vaccination becomes widespread, there will undoubtedly be an unprecedented surge in demand for oil as travel across the world returns to normal.
Back in 2019, the company recognized $8.65 billion in profits in the first nine months of operations compared to a $2.37 billion loss in the same period this year. That $11 billion differential in net income could all be recovered in a very short period of time next year as coronavirus vaccines roll out. ExxonMobil stock now offers a dividend yield of over 8% per year as an icing on the cake, in addition to its rebound potential.
3. Teladoc Health
Teladoc could easily be the top healthcare stock to invest in at the moment due to its undervalued future expansion potential. In October, the company completed its multi-billion dollar acquisition of Livongo Health, allowing it to offer digital diabetes and chronic disease management solutions to its member base. Teladoc estimates that at least 17 million out of its 70 million members are eligible for Livongo's services.
This gives the two companies a big edge in expanding into the estimated $121 billion telemedicine market in the U.S. alone. On top of that, Teladoc can also recognize significant cost efficiencies via integrating the two platforms and scaling Livongo's product to over 175 countries that Teladoc operates in. The company expects the acquisition will save $60 million within two years and generate over $500 million in revenue synergies by 2025. In 2020, Teladoc projects it will generate close to $1 billion in revenue ($1.34 billion together with Livongo), representing a massive increase over the $553 million it brought in 2019.
Aside from seeing a physician from the comfort of one's own home, there are also significant perks for healthcare professionals to go digital. For example, doctors can use Teladoc's interface to seamlessly navigate a patient's medical history, analyze real-time biometrics, and take account of treatment suggestions based on the platform's algorithm-driven recommendations. As for investors, it should be no surprise that this revolutionary stock is up a whopping 157% over the past 12 months. Together with Moderna and ExxonMobil, Teladoc is a stock you will not want to miss out on.
