Top Bird Flu Vaccine Stocks to Buy Now
Wed, Apr 17, 2013
Investment In Bird Flu Stocks
It’s the most nonsensical investment you could make. Yet it might also be the most profitable.
The latest iteration of the bird flu is slowing spreading throughout China. Reports over the weekend have confirmed the bird flu has made its way beyond the initial few reported cases to more than 100 miles away.
The New York Daily News reported, “Beijing reports new strain of bird flu, marking the first time the sickness has spread outside of eastern China.”
That means it’s spreading. And if it spreads far enough, a major media story will be born, and a fortune in profits for investors looking at Vaccine Stocks now will follow.
Every few years some rare type of flu will take over the media and cause a public panic.
The results are always the same. Demand for masks soars. Medical gloves sell out. And, most importantly from an investor’s perspective, a small group of vaccine stocks go through the roof.
Now when this happens, you have to throw fundamentals out the window.
After all, these are primarily “story” stocks. They are driven up when a story is entering the mainstream. When the news is over though, they collapse.
There’s no fundamental reason any of them should soar. They just do so consistently when there is a flu scare.
What really matters with these stocks is the trend. And when it comes to a growing trend in vaccine stocks, the potential profits have consistently exceeded 500%.
Just look at what happened during two of the most recent major flu “pandemics” to sweep through the world – the Avian Flu in 2005 and the Swine Flu of 2009.
BioCryst (NASDAQ:BRCX), a small vaccine company, was in the right place at the right time twice:
As you can see, there was a massive spike in late 2005 and another one in mid 2009 around the time the bird and swine flues, respectively, dominated the media.
Both surges didn’t last. BioCryst shares slowly collapsed as did fears of global pandemics.
BioCryst wasn’t alone though. The same situation played right into the hands of Novavax (NASDAQ:NVAX) shareholders too.
Novavax shares surged from a low of $1 to more than $7 per share during both of the past two major flu scares:
The charts of the two companies are nearly identical. And they both show the massive capital appreciation potential of when the flu de jeur sweeps the markets.
Don’t Ask Why, Just Buy
Right now the world could be on the verge of another major breakout of bird flu panic.
Frankly, we’re due. And these two vaccine stocks, Biocryst and Novavax, offer the best pure-play on any flu outbreak or even just the fear of a bird flu outbreak.
When and if it comes, history shows these stocks will absolutely soar.
Note the “if.” That’s a big one and key to determining how to play this one.
We know the concept behind this trade is ridiculous. It, however, has worked in the past. And there’s no reason to expect it will not work again in the future.
But there are risks here. So if the story doesn’t get the widespread attention, these two stocks will go nowhere. And if the overall markets get hit, these two stocks will surely get hit too.
That’s why we recommend a simple trading method which reduces risk and still keeps all the capital appreciation potential.
We call it “buying stocks that go up.”
Simply put, you buy a small amount right away. Then if the stock goes up, you buy more. If it keeps going up, you keep buying until you get stopped out because of your trailing stop-loss.
And if the story never materializes and the shares go nowhere, you have just a small position to liquidate. You never have much capital at risk.
This is the perfect trading strategy for a situation like this. Because if managed properly, the risks are next to nothing and the potential rewards are massive.
Basically, it’s like risking a dime to make a dollar. And in a market like this, that’s probably the best trade you’ll find.
For now, get ready because we could have a new bird flu bubble in vaccine stocks in the next few weeks and months.
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Executive Editor, Contrarian Insights
The Group of Big Investors in United States.
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