Investing $5,000 can be a good amount to put into a growth stock because it can lead to significant long-term gains. If it can rise in value by 10% per year, it would take a little more than seven years for it to double your returns.
Rather than investing a few hundred dollars or less, a $5,000 investment can give you enough skin in the game to ensure you're making a fair bit of money if you pick a good stock. Plus, investing $5,000 can give you an incentive to be more selective when picking an investment to add to your portfolio.
Although Pfizer's sales declined by more than 40% last year (due to a drop in COVID-19 vaccine and treatment revenue), this is still a growing business that can potentially produce some attractive gains for investors in the long run. The company has been investing in its own drug development and expanded operations through acquisitions. By doing so, its business has become broader and less dependent on any single drug or category.
That being said, a huge opportunity for Pfizer is in weight loss medications. The company may be one of the best GLP-1 plays right now, which is why I think a $5,000 investment in the business could pay off significantly.
Pfizer is working on a GLP-1 weight loss pill, danuglipron, which has been showing progress in clinical trials, and management is optimistic that it will be among the first ones that regulators will approve. If that happens, it could be the growth catalyst that investors need to get bullish on the stock again. The company has decided to go forward with a once-daily version of danuglipron following encouraging phase 2b trial data.
It could still take multiple years before the drug obtains approval and starts generating meaningful revenue for Pfizer, but this can be a much safer way for investors to gain exposure to the highly competitive GLP-1 market, which could be worth more than $100 billion. With Pfizer, investors get a much more diversified business that's focused on weight loss, oncology, and many other areas of healthcare.
The stock is trading down 10% year to date and near its 52-week low. It can make for a tremendous buy, as it's trading at a forward price-to-earnings (P/E) multiple of less than 9, based on analyst estimates.