RFK Jr. Will Give Pharma Stocks a Healthy Jolt in 2025

Several months ago, Robert Kennedy Jr. believed his independent bid for the U.S. presidency had a shot. He explained that FDR won votes through radio in 1932, his uncle JFK benefitted from television in 1960, and long-form podcasts would help propel him into the White House in 2024. Though things evolved otherwise, hours of conversation between RFK Jr. and various hosts are available for the public to dissect his personality.

On November 14, Trump announced he would nominate RFK Jr. to lead the Department of Health and Human Services (HHS). It’s a big department with a $1.6 trillion budget that employs over 80,000 people. Without skipping a beat, multiple pharmaceutical stocks immediately sold off in stride, losing 3.5% the following day.

We believe this selloff is a buying opportunity.

Has anybody seen JD Vance since the election? My best guess is he’s staying as far away from the spotlight as possible to prevent an ugly clash with Trump, the latter of whom must be loving this attention as of late. Similarly, RFK Jr. must know that sweeping changes at HHS will make him the centre of attention in Washington, something his boss might not appreciate.

Irrespective of RFK Jr’s controversial views, based on the long-form podcast interviews I heard, he doesn’t strike me as the kind of person that will be pushed around. Some of his own siblings signed a press release calling him “dangerous” to their country, yet he shrugged it off. He’s very well educated having studied at Harvard, law school, and the London School of Economics – similar to a stubborn Pierre Elliott Trudeau – and we can already smell a clash coming.

Just ask some of those other hard-headed cabinet members from the first term that didn’t survive. Click here to see a list of those names.

Lastly, this is a big department. A private sector businessperson that briefly worked in the public sector recently told me that it’s very difficult making changes in government. He found that every single rule or regulation that is a part of the bureaucracy was created for a good reason and there’s always a group of people working to protect it from disappearing. 

We bought Pfizer last March for suitable client accounts and paid about $27.38. Since the nomination announcement, the stock is down about 5% to $25.65. Rather than purchase an additional pharmaceutical stock for the reasons cited above, we like Pfizer enough to add to the position for existing clients. Not only does it pay a 6.5% dividend yield ($1.68 each year) but also management is doing a fantastic job delivering on its promises. The company has exceeded our earnings expectations every quarter since we bought the stock and the last few times it has reported numbers, forward-looking guidance has been adjusted upwards. Because its future is in oncology, we are bullish on its future and view the recent sell-off as a strong buying opportunity. 

-written by Jeff Pollock