Conventional investment wisdom advises buying stocks when their prices are low, but if you anticipate a company has long-term growth potential, it’s not necessarily a bad move to invest after a significant price rally. Walmart and Moderna have delivered strong performances recently, yet based on their long-term prospects, they may still be worth buying and holding.
Over the past six months, Walmart’s performance has been impressive, especially considering the challenging environment it has navigated. Facing rising costs for many retailers due to tariff issues, Walmart has weathered the storm better than most of its peers, thanks in part to its low-price strategy. Consumers are always seeking value, particularly during periods when everyday essentials become more expensive. Walmart provides that value, attracting significant foot traffic even when market conditions are tough.
Walmart is not only a leading physical retailer in the U.S. but also a major player in e-commerce, offering lower prices online than many competitors. The company has once again demonstrated its ability to navigate difficult times. Investors should look beyond the stock’s short-term performance this year and focus on the company’s long-term prospects.
Walmart’s extensive nationwide retail network, its enormous scale that grants it significant bargaining power with suppliers (allowing it to secure favorable prices and pass savings on to consumers), and its willingness to embrace new technologies, including artificial intelligence, position it as a stock capable of delivering superior long-term returns. Additionally, the company boasts a robust dividend program. Walmart is a member of the “Dividend Kings,” a group of companies that have increased their dividends for at least 50 consecutive years. Such a long track record of increases undoubtedly instills confidence in investors regarding the stability of its dividend policy.
Could this year mark a turning point for Moderna’s eventual rebound? The biotechnology company has struggled in recent years due to declining sales of its COVID-19 vaccine. However, the company has also made meaningful clinical and regulatory progress, seemingly moving closer to launching a significant new product.
Moderna reported that its investigational personalized cancer vaccine, mRNA-4157, demonstrated strong efficacy over a five-year period. When used in combination with Merck’s Keytruda, it was more effective at preventing recurrence or death in melanoma patients compared to Keytruda alone. The vaccine is currently undergoing multiple Phase 2 and Phase 3 studies and could potentially receive approval within the next few years. Moderna’s mRNA platform holds promise beyond this single product. Over the next five years, as new product launches drive improved financial results, the company could introduce several novel vaccines.
Moderna’s stock is up 73% so far this year, and it may not be able to sustain this momentum indefinitely. Nevertheless, the company’s innovative capacity could lead to crucial product approvals that help fuel strong revenue growth and stock market performance over the medium term.
