Some of our members are interested in Novavax (NVAX), hence this post.
NVAX is an excellent example of Keynes’s statement, the title of this post.
Four months ago (October 2021), Morningstar rated NVAX as undervalued at an 18% discount and gave it three stars.
On January 17, 2022, Morningstar rated NVAX as undervalued at a 46% discount and kept it at three stars.
On January 19, 2022, Morningstar rated NVAX as undervalued at a 56% discount and moved it to four stars — a great example of a cigar butt investment. Savvy investors are buying more.
The company has $1.5B in net cash and is selling for less than 4X earnings (2022 estimates). It should generate huge cash flow this year.
Even if investors are concerned about what happens post-Covid, with cash flow, the company can always buy into another growth category.
Except for Fidelity, institutions own 51% of NVAX now and are adding more to their existing positions. They recognize the cigar butt nature of this stock.
Only in members’ “fun” portfolios does the Monday Morning Program recommend picking individual stocks (habit number three – buy the US economy as a whole).
It is possible for a “fun” portfolio to outperform by ignoring one or more of the six habits, by selling derivatives, buying cigar butt stocks, etc., but it is unlikely.
No one needs a “fun” portfolio. However, those investors who decide to maintain one, need to keep it to a small percentage of their overall market holdings. Much of the time, “fun” portfolios are not much fun. Wall Street loves them.
With the habits of the Monday morning program, luck hardly matters.
We have designed the Monday Morning Millionaire Program to offer abstracted investment education. Over the last two decades, the program has outperformed over 90% of portfolios, including professionally managed ones.
The program does not provide any investment advice or endorsements.
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