Room for one more?
-Novavax to Moderna and Pfizer
Novavax (NVAX) closed up 15.9% yesterday on news that the company’s highly anticipated vaccine was authorized for emergency use in Indonesia. The company also said that the vaccine is “on the road to authorization in Canada and the European Union.”
- Stanley C. Erck, Novavax’s president and CEO, said their vaccine “will fill a vital need for Indonesia, which despite being the fourth most populous nation on earth, continues to work to procure sufficient vaccines for its population.” I think the biggest surprise of that statement is finding out Indonesia is the 4th most populous nation in the world?
- The NVAX ‘vid vax is protein-based, compared to those of Moderna, Pfizer, Astrazeneca, and Johnson&Johnson, which are either messenger RNA or carrier vaccines.
- The company’s shot demonstrated an efficacy of over 90% against variants in late stage trials.
Novavax is up 25% in just the last 5 days. In comparison, Moderna (MRNA), which was informed Friday evening by the FDA that they need more time to evaluate potential risks of myocarditis associated with their Covid-19 vaccine in adolescent males, is down 5% over the same time period. As is the case with all covid-related news, I plan to keep not only NVAX, but MRNA, PFE, and BTNX on my watchlist as well. One such piece of news to be on the lookout for is the CDC’s approval for Pfizer’s vaccine for kids aged 5-11 years old, which is expected to be announced by tomorrow.
Look Out Below
Zillow had quite a Monday
Zillow (Z) had a case of the Mondays, watching its stock dive 6.2% after an analyst pointed out that the majority of the houses the company had purchased to flip were underwater (not literally, unless the properties were in Atlantis).
- KeyBanc’s Edward Yruma looked at about 650 Zillow owned homes and estimated that 66% of them were worth an average of 4.5% less than when purchased.
- The 650 home sample represents about 20% of the company’s inventory, so Zillow probably should get a hold of somebody at HGTV to get the renovation wheels turning.
- Z is looking to sell 7k homes for roughly $2.8B to institutional investors, likely packaging homes together instead of selling them one by one.
- Back in October the company announced that they would be pausing home buying, even as other iBuyers such as Redfin (RDFN) and OfferPad (OPAD) were in expansion mode.
Zillow has had a rough 2021 and is down about 25% on the year. It’s odd that a real estate services company is struggling during a property market that has been hotter than Squid Game inspired Halloween costumes. The Internet, Media, & Technology (IMT) segment should be crushing it since everybody has been obsessively stalking houses during the past 18 months, but the Homes & Mortgages segment appears to be an albatross. I guess it’s time for Zillow to pivot from Love It to List It.
Pedal to the (rented) metal
Auto rental companies have been sitting pretty for the past few months, but none are on a tear like Avis. $CAR hit a record high on Friday with shares closing at $138.20, up 50% since Sept 15. You read that right- and that was before they dropped unbelievable Q3 earnings after yesterday’s close, almost doubling their revenue from Q3 2020. The car-rental company gained 5.30% after hours.
- CAR netted their highest-ever EBITDA this quarter- a whopping $1.057B. At the same time, they were able to purchase 11.6M shares, lowering their outstanding share count by 16% from June 2021.
- They attribute their stellar numbers not only to sky-high demand and the semiconductor shortage, but also “strong cost discipline,” which may or may not be a shot at Hertz, who went bankrupt last May before coming back from the dead this summer.
- But Hertz probably couldn’t care less, because the rising tide has lifted all auto rental boats. They’re up 35% since emerging from bankruptcy, and are looking to re-IPO before the year’s end with better prospects and ex-Ford Motor CEO Mark Fields at the helm.
One person’s loss is another person’s gain, and the fact that the global supply chain snafu will last into early 2022 is actually great for Hertz and Avis. CAR has enjoyed higher numbers of rental days and higher revenue per rental day as a result of the bottleneck, and Hertz probably has, too. One potential area of concern for both companies is the recent spate of flight cancellations by airlines, which could deliver a gut shot to demand earlier than expected. Barring a major hitch like that, auto rental companies are likely to look healthy for a while.