Over the trailing year, a majority of my single-company opinions have been at least middle of the road for obvious reasons. Although I do have broader economic concerns, benchmark indices have proven resilient. So, my headline to consider exiting Novavax (NASDAQ:NVAX) stock might seem controversial.
However, I genuinely believe taking the green ink on NVAX stock is fundamentally the safe-ish choice.
Of course, nothing is truly safe in the capital market. Who knows? The novel coronavirus pandemic could worsen, which would be a science-based catalyst for NVAX stock. Sure, the world now has a glut of Covid-19 vaccines but most of them depend on novel approaches, such as messenger-RNA-based vaccines or viral-vector vaccines.
Novavax’s subunit approach, while still a groundbreaking technology, has been proven in other indications, most notably the hepatitis B vaccine. Therefore, the thesis behind bullishness for NVAX stock – and something that I’ve mentioned countless times previously – is that your unvaccinated layperson will find comfort in Novavax’s vetted approach.
Of course, Novavax losing out to other competitors in the clinical trial race hurt the narrative for NVAX stock. Yes, it may be a more palatable jab but without access, it’s a moot point. Therefore, it’s not entirely surprising that a recent wave of positive news bolstered shares.
Per the Associated Press, Indonesia became the first country to greenlight Novavax’s Covid vaccine through an emergency use authorization. As the report noted, the “vaccine is easier to store and transport than some other shots, which could allow it to play an important role in boosting supplies in poorer countries around the world.”
Further, Novavax already filed for authorization in the U.K., European Union, Canada, Australia, India and the Philippines. According to a company statement, it’s on the road to receiving authorization in the EU and Canada.
Good News Might Not Sustain for NVAX Stock
On paper, the narrative seems to have again shifted positively for NVAX stock. But it also might be too late. Yes, the infrastructural flexibility of Novavax’s vaccine makes it appealing for poorer nations, but you’ve got to imagine that the payout wouldn’t be all that great for the company (excuse my cynicism).
More critically, NVAX stock runs into a deep-seated psychological barrier. While the underlying jab has more provenance in the field than mRNA vaccines, for instance, that message had to have gone out much, much earlier. In other words, those who were already at least willing to consider inoculation have already been inoculated. What remains, then, are the never-vaxxers.
True, never-vaxxers are different than strident anti-vaxxers in that another deadly wave could change their mind. But as of now, the biggest hotspot is Russia. And the Russians are not going to request Novavax vaccines out of politics and pride.
But even if the Russians were desperate, their government did a bang-up job on radicalizing much of their population. That’s according to the Baltimore Sun, which reported that Moscow’s concerted disinformation campaign – not just for Covid-19 but for other epidemics – may have contributed to its own citizenry buying into government endorsed anti-vax propaganda.
And that’s occurring right at the moment when Moscow needs mass cooperation to defeat its resurgence of the coronavirus.
Ultimately, such a dynamic does NVAX stock no good because so many other people across the world have similar reservations. If the Russians can hit us Americans with cyber misinformation campaigns, they can do so to many other countries.
With the Russians being experts at psychological warfare, Novavax and other vaccine companies have a mountain to climb. Indeed, the Russians are so successful that even the Russians don’t trust their leadership regarding their own vaccine rollout.
Consider Hitting the Exits
Interestingly, despite the great news, NVAX stock never really threatened to hit its second half of 2021 high. Instead, it’s currently sandwiched in the middle between the peaks above and the doldrums below. It’s just my opinion but I think this is loose evidence of pensive trading.
Therefore, I would look to the fundamentals for determining what to do with Novavax shares and they’re not pretty as I mentioned. Previously, the problem for the company was that Novavax was the solution everyone wanted but no one could access. Today, many people can access it but it’s questionable that they will want it, particularly in countries where vaccine disinformation has spread.
Personally, it appears that Novavax has endured too many setbacks. Therefore, I would look at its recent rise as a selling opportunity, not one to establish a long-term position.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
