Coronavirus Vaccine: What TSX Investors Need to Know

This morning, markets around the world are rallying on very promising news of a coronavirus vaccine. Here’s which Canadian stocks will be most affected.

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Early this morning, it was announced that Pfizer has reported that its coronavirus vaccine had shown extremely promising results. The vaccine, which is in its third stage of clinical trials, showed it was more than 90% effective at preventing COVID-19.

Several high-level medical experts have called this news extremely promising, and stock markets around the world are seeing massive rallies.

The next step is that the company needs to continue to test the vaccine for safety concerns. It’s been proven that the vaccine can prevent the virus. What needs to be proven now is that the vaccine won’t cause major underlying side effects. So, for the next few weeks, the company will be monitoring its volunteers for any safety concerns.

After that, Pfizer can apply for emergency authorization from the FDA.

The company already has a major head start in producing the coronavirus vaccine as well. So, if it does get authorization, it expects it can vaccinate up to 650 million people by the end of 2021.

The timeline still looks like the vaccine won’t be available until spring 2021 at the earliest. It’s also a little unclear how long the immunity will last, meaning there’s a possibility it could be a yearly shot.

Despite that, any news of a vaccine is being welcomed by markets, and there are several major opportunities for investors this week.

Coronavirus vaccine: A top TSX stock to buy

Stocks around the world are rallying as a result of the news of a potential coronavirus vaccine. This is not surprising to see at all. So far, as expected, some of the biggest movers are those businesses that have been impacted the most by the pandemic.

That means a TSX stock like Air Canada (TSX:AC), which investors have been eager to buy over the last few months, may finally have a catalyst to give it some momentum.

Over the weekend, the Canadian government was reported to be in talks about an airline stimulus package to come soon.

And now, with the news of a potential coronavirus vaccine giving investors a lot more clarity on the duration of the pandemic, stocks like Air Canada could see a major boost to their share prices.

One of the major reasons Air Canada has been so cheap, in addition to its business seeing a major impact from the pandemic, was because there was so much risk that many investors were avoiding the stock.

Now that a significant amount of the risk looks like it could be eliminated with this announcement, the stock will almost certainly see a massive increase in demand for its shares this week.

As of Friday’s close, Air Canada was trading more than 70% off its 52-week high. That is extremely cheap, trading at less than $16 a share.

That means if the coronavirus vaccine helps Air Canada gain momentum and rally back to nearly $50 a share eventually, investors would see a more than 200% return on investment.

Bottom line

2020 has been an incredible year for investing with so many different opportunities for investors. The news of a very promising coronavirus vaccine is moving markets in a major way, and this will create a tonne of potential for investors.

In addition to Air Canada, there will be a tonne of TSX stocks that see a big rally today. However, it’s the TSX stocks that are trading dirt cheap from the pandemic that will offer investors the most upside.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Daniel Da Costa has no position in any of the stocks mentioned.

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