To The Moon

On Fri, 20 Jun 2025, in its note to clients $Goldman Sachs(GS)$ said it updated its Sharpe Ratio basket - a list of 50 stocks with the highest expected risk-adjusted returns.

So far, the basket has gained +3% YTD, surpassing S&P 500's +1.7% gain.

For 2025, the S&P 500's overall risk-adjusted return has been "lower than usual" says GS.

The strategists attributed this to increase volatility & lower-than-average returns from fears around tariffs.

The bank rebalanced its portfolio by choosing stocks with a high prospective Sharpe Ratio, a gauge for risk-adjusted returns.

This is derived by dividing “a percentage return to a stock's consensus 12-month price target” by its “6-month option-implied volatility”.

According to Goldman Sachs:

• The median S&P 500 stock is expected to post an 11% return to its 12-month consensus price target.

• The 6-month implied volatility is 28.

• This yield a prospective risk-adjusted return of 0.4.

Below are the Top 10 newest additions to Goldman's Sharpe basket.

I have sorted them based on :

• Goldman’s sharpe ratio.

• In the event of a tie, defer back to the stock’s “return to consensus price target” parameter.

(1) Viatris.

• Ticker: VTRS

• Return to consensus price target: 61%

• Sharpe Ratio or Expected return over implied volatility: 1.5

• Industry / sector : Drug Manufacture - Speciality & Generic/ Healthcare.

(2) Moderna.

• Ticker: MRNA

• Return to consensus price target: 88%

• Sharpe Ratio or Expected return over implied volatility: 1.3

• Industry / sector : Biotechnology / Healthcare.

(3) Thermo Fisher Scientific.

• Ticker: TMO

• Return to consensus price target: 42%

• Sharpe Ratio or Expected return over implied volatility: 1.2

• Industry / sector : Diagnostic & Research/ Healthcare.

(4) Fiserv.

• Ticker: FI

• Return to consensus price target: 37%

• Sharpe Ratio or Expected return over implied volatility: 1.2

• Industry / sector : Information Technology Services / Technology.

(5) Cooper Companies.

• Ticker: COO

• Return to consensus price target: 37%

• Sharpe Ratio or Expected return over implied volatility: 1.2

• Industry / sector : Medical Instruments & Services/ Healthcare.

(6) PG&E Corp.

• Ticker: PCG

• Return from consensus price target: 45%

• Sharpe Ratio or Expected return over implied volatility: 1.1

• Industry / sector : Utilities - Regulated Electricity/ Utilities.

(7) Salesforce.

• Ticker: CRM

• Return to consensus price target: 37%

• Sharpe Ratio or Expected return over implied volatility: 1.1

• Industry / sector : Software - Application/ Technology.

(8) Lennar Corp.

• Ticker: LEN

• Return to consensus price target: 34%

• Sharpe Ratio or Expected return over implied volatility: 0.9

• Industry / sector : Residential construction/ Consumer Cyclical.

(9) EPAM Systems.

• Ticker: EPAM

• Return to consensus price target: 33%

• Sharpe Ratio or Expected return over implied volatility: 0.8

• Industry / sector : Information Technology Services/ Technology.

(10) Enphase Energy.

• Ticker: ENPH

• Return from consensus price target: 45%

• Sharpe Ratio or Expected return over implied volatility 0.6

• Industry / sector : Solar / Technology.

My viewpoints: (mine only)

Of the 10 tickers, I could only identify 4 of them :

• $Moderna, Inc.(MRNA)$.

• $FISERV INC(FI)$.

• $Salesforce.com(CRM)$.

• $Enphase Energy(ENPH)$.

Due to limited real estate, I will dwell on MRNA, the stock that I know best due to my on-again, off-again follow up.

In Retrospect.

• In 2021, who would have thought that MRNA that peaked at $449.38 per share would have ended up at $25.90 by 20 Jun 2025.

• To be fair, back in 2019, MRNA’s stock price was trading between $12 - $27.

• It came into focus due to its invention of the mRNA Covid-19 vaccine, making MRNA - one of two Covid-19 vaccines available.

• The other pharmaceutical company was none other than Viagra’s maker - Pfizer.

• Its surge was driven by emergency approval and global distribution of its Covid-19 vaccine that generated unprecedented revenue.

Stock Price Crash.

Below are reasons that have contributed to MRNA stock price crash from its peak.

It is a -94.24% fall from its peak. (see above)

(1) Falling demand:

• As the pandemic eased, demand for Covid-19 vaccines shifted to a seasonal model, severely reducing Moderna's sales / revenue.

MRNA - quarterly revenue results

(2) Severe financial losses.

The knee jerk fall came in its Q2 2023 earnings report, that painted a dire picture at first glance.

• Reported revenue of $344 million was a -92.6% YoY decrease from $4.7 billion a year ago.

• MRNA’s net loss of $1.4 billion in Q2 2023 was a stark contrast to the net profit of $2.2 billion one year ago. (see above)

• Needless to say, the stock price reflected investors’ confidence.

(3) Competition.

In 2024, MRNA reported lower sales projections in EU, following the Europe bloc’s re-negotiated vaccine supply contract with Pfizer & BioNTech.

The news, together with MRNA’s underwhelming outlook significantly impacted investor confidence, leading to a more than -20% drop in price in a single trading session after its Q2 2024 earnings release in August 2024.

Light At The End Of The Tunnel ?

Moderna’s claim to fame has been its Covid-19 vaccine and the pandemic remains a major reason why the company still has a market capitalization of approx. $10 billion.

Post-Covid, MRNA struggles to find other revenue drivers and sharp drops in sales of its flagship product revenue as well as profitability have caused many investors to cash out.

Moderna hopes to capitalize on the recent spike in Covid cases in Hong Kong, Singapore and very likely in the fall over the western hemisphere. (see above)

Its vaccine has proven effective against current strains of the virus. (see above)

The company has continued to develop vaccines that target RSV and Flu, and those treatments could save lives and bolster revenue for MRNA at the same time.

MRNA as a long term investment?

(1) Bird flu vaccine funding lost.

Despite strong Phase 1/2 trial results showing robust immune response & safety for Moderna’s mRNA bird flu vaccine, US Department of Health & Human Services terminated roughly $600 million in funding.

The department cited continued investment was not scientifically or ethically justifiable due to concerns over the under-tested nature of mRNA technology and vaccine safety.

The funding signed during Biden administration was supposed to arm US with a vaccine that could combat bird flu (HSN1). Now, it seems due to politically charged agenda, its a wasted effort.

The loss of federal funding introduces uncertainty for the program's future, but Moderna is exploring other options to continue development.

(2) Covid+Flu vaccine application withdrawn.

On 21 May 2025, it was reported that Moderna has withdrawn application to seek approval for its “flu +Covid” combination vaccine candidate, to wait for efficacy data from a late-stage trial of its influenza shot, which is due later this year.

The delay was largely expected after Moderna said earlier this month that it does not anticipate approval of the shot until 2026 due to the need for more data on the flu vaccine.

Again, another money-spinner put on back-burner for a tad longer than expected.

(3) Other drugs / vaccines development.

Inspite of above setbacks, Moderna is pressing ahead with its other drugs or vaccines development. (see below)

However, these work-in-progress items are not due for US’s FDA approval until 2027 or another pandemic arises.

As an investor, can you afford to wait until 2027 (or later) to see the fruits of the labour ?

Remember to check out my other posts. (See below). Help to Repost ok, Thanks.

Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks.

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• TSLA falls becos Robotaxi failure to launch ? Fri, 20 June. Picked post.

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• Do you think MRNA deserves to be amongst the Top 10 picks ?

• Do you think Technology & Healthcare sectors are the must-invest in H2 2025 ?

• Do you think all this still matters in light of US joining Israel in Iran’s attack ?

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