Vertex Pharmaceuticals Incorporated (VRTX): A Promising Feminist Stock To Buy?

We recently compiled a list of the 11 Best Feminist Stocks To Invest In. In this article, we are going to take a look at where Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) stands against the other feminist stocks.

With the passage of time, the role of women in the modern day workplace has slowly started to grow. In less than a century, more women not only lead companies but are also among some of the wealthiest individuals in the world. At the same time, women have demonstrated that they are equal to men when it comes to disrupting industries. One of the best examples of this phenomena is America’s best known rocket company SpaceX. While SpaceX is famous for its founder and billionaire Elon Musk, the firm’s chief operations officer and president Gwynne Shotwell has been equally responsible for its massive success in the rocket industry which has dislodged decades of monopolies held by a few defense contractors.

In fact, this rising trend of women leading the charge at some of the biggest companies in the world has also generated interesting statistics when it comes to compensation. Data from Equilar shows that in 2023, out of the 341 CEOs part of the study, 25 were women. Their median pay package stood at $17.6 million, which according to Equilar, was 7.7% higher than the figure for the complete data set. At the same time, the 25 female CEOs saw five new executives added to the list when compared to 2022.

Considering this, it would appear that the gender pay gap in the US appears to be narrowing. To confirm this, we’ll have to look at the pay statistics for the entire country as opposed to only S&P 500 CEOs. Well, on this front, data gathered by Pew shows that there’s a lot to be done. The research firm points out that in 2002, women earned 80% of what men were paid. Two decades later, i.e. in 2022, this stood at 82%, indicating that there’s a lot more to be done to decrease the wage gap between the two genders. However, at the same time, younger women might be changing these trends. This is because according to Pew, women aged between 25 and 34 earned 92% of their male counterparts, which is quite higher than the figure of 86% in 2002.

With these details in mind, we decided to take a look at the best feminist stocks to invest in.

Our Methodology

To make our list of the best feminist stocks to invest in, we ranked publicly traded Fortune 500 companies with female CEOs by the number of hedge funds that had bought the shares in Q1 2024. Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

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Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)

Number of Hedge Fund Shareholders In Q1 2024: 62

CEO: Dr. Reshma Kewalramani FASN, M.D.

Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is a biotechnology company headquartered in Boston, Massachusetts. The average of 25 one year analyst share price targets for the firm is $468.39, which is lower than the current share price. The stock is rated Buy on average. RBC Capital was out with a bearish note for the firm in June 2024 when it cut Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)’s share price target to $421 from $424 and kept a Sector Perform rating. The research firm highlighted that potential royalty payments by the biotechnology company for a pain treatment could end up impacting its 2024 EPS by 2%. It added that while Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) has an impressive pipeline of drugs, their potential might already be reflected in the share price.

Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)’s forward P/E ratio of 29.50 implies that investors expect the stock to grow faster than the broader market. This is unsurprising for the biotechnology industry, which is known for its high risk and high reward structure. Harding Loevner mentioned the firm in its Q4 2023 investor letter and shared:

The potential for technological innovation to create shareholder value goes far beyond the effects of AI, of course. For example, Vertex Pharmaceuticals is building a significant competitive advantage through its unique approach to drug discovery.

Unlike most drug developers, which focus on mitigating symptoms of an illness, Vertex seeks to understand and address the causal biology of a disease more fully. This approach has helped the company establish a wide lead in treating cystic fibrosis (CF), a rare disease that causes mucus buildup in organs such as the lungs. Vertex’s research and treatments have targeted the root cause of CF, which is that a particular protein becomes misfolded and unable to move chloride out of a cell, resulting in an imbalance between salt and water. Its scientists have been able to do this by working with the lung cells of real CF patients, an advantage over using engineered animal cells to simulate the disease-causing mechanism to determine which drug candidate is most promising for humans. Vertex’s latest therapy, approved in 2019, is Trikafta, a combination of three medicines that targets a mutation found in 90% of CF patients.

. . .As Vertex turns toward treating Type 1 diabetes and non-opioid pain management next, the company’s CEO is forecasting a “milestone-rich period.” Meanwhile, the commercial rollout of Trikafta has been so successful that management increased company revenue projections twice in 2023. Each CF treatment introduced by Vertex has not only made substantial improvements over earlier generations but also arrived long before the patents expired on the previous therapy. By quickly and repeatedly raising the standard of care, Vertex was able to ward off competition from a potential new market entrant. The rival found it too difficult to catch up and ultimately abandoned its efforts.

Overall VRTX ranks 10th on our list of the best feminist stocks to buy. You can visit 11 Best Feminist Stocks To Invest In to see the other feminist stocks that are on hedge funds' radar. While we acknowledge the potential of VRTX as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than VRTX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

 

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Disclosure: None. This article is originally published at Insider Monkey.