Editor’s note: This article is part of InvestorPlace.com’s Best Stocks for 2020 contest. Matt McCall’s pick for the contest is Aimmune Therapeutics (NASDAQ:AIMT).
There’s nothing better than waking up to news on a Monday morning that one of your stocks nearly tripled overnight.
That’s how I started the first week of September.
Nestle (OTCMKTS:NSGRY) announced that it would buy all the shares of Aimmune Therapeutics (NASDAQ:AIMT) it didn’t currently own for $34.50 each. It was an all-cash deal worth $2.6 billion that valued Aimmune at a 174% premium over its previous close.
Those of you who have been following the Best Stocks for 2020 contest know that I have been extremely bullish on Aimmune. I introduced it to you nine months ago as a leading biopharmaceutical that focuses on the unmet needs of people who suffer from food allergies.
I recommended Aimmune in anticipation of the approval of its lead drug candidate. That worked out as expected, as its treatment for peanut allergies got the green light from the U.S. Food and Drug Administration in January. Palforzia should remain the only option for several years.
Despite this potential, the stock was under pressure as the pandemic swept the world shortly after Palforzia received FDA approval. Because people stopped visiting their allergists amid the shutdowns, the revolutionary drug’s rollout was slower than expected.
This led to the stock falling, which in turn created a great buying opportunity. And anyone who took advantage of that was rewarded nicely.
What Should You Do With AIMT Stock Here?
At the buyout price of $34.50, Aimmune’s stock would be up more than 250% from its March lows. That’s incredible. But even if you had bought near the stock’s summertime highs, you’d still be sitting on nearly a double!
Here’s the thing…
I believe Nestle is getting Aimmune for a song. This company is worth far more than $3 billion, but it looks like this will be the final offer and Aimmune will be bought out at $34.50 per share.
Therefore, it’s time to let go of your stock here.
If you bought Aimmune the day I introduced it to you on Dec. 23, you’re up about 7.5% at the buyout price. That’s not a huge return, sure. But it’s better than what the market has handed us this year. Over the same timeframe, the S&P 500 is up 4.5% and the Russell 2000, which AIMT is a member of, is down nearly 10%!
And here’s the even better news…
I still expect this to be the Decade of Biotech.
That’s saying a lot considering I believe the Roaring 2020s will go down in history as the greatest decade ever for stocks. That means it will also be the best opportunity for investors to create life-changing wealth.
Even in this crazy first year of the decade, healthcare stocks — and biotech stocks especially — have been strong. On the chart below, you can see that while the S&P 500 is up about 4%, the iShares Nasdaq Biotechnology ETF (NASDAQ:IBB) is up 12% and outperforming by 200%! And that’s after biotech stocks have pulled back recently.
Best Stocks: The Future of Healthcare Is Taking Shape Now
The amazing future of healthcare will really take shape in the next couple of years. The next decade will bring advancements that we can only imagine in our wildest dreams.
From genetic sequencing for everyone… to gene therapy curing previously incurable diseases (possible even peanut allergies!)… to remote healthcare and monitoring. We are about to lead much healthier, happier and longer lives.
Aimmune Therapeutics was one of many winners of this transformative megatrend.
There are countless more out there. As long as you position yourselves in the right ones, you can set yourself up for massive profits in the years ahead.
On the date of publication, Matt McCall did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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