Selling accelerated this week after last week was the worst since September. The Nasdaq index is in correction territory, down 10% from the high. But even as the market is going to heck in a handbasket, AbbVie Inc. (ABBV) keeps chugging higher, observes Tom Hutchinson, editor of Cabot Income Advisor.
The big issue seems to be tariffs. Tariffs on China, Canada, and Mexico are escalating. The new Canadian Prime Minister also appears to be taking a hard line, and it looks like the trade issues won’t be resolved for a while. But it’s also the fact that tariffs are hitting the economy at a vulnerable point as fears of a slowing economy are growing.
AbbVie Inc. (ABBV)
As for ABBV, it yields 3.1%. Plus, as a healthcare company, its business isn’t negatively affected by a slower economy or probable tariffs. Meanwhile, the ascent that began after the earnings report in January continues.
Immunology drugs Skyrizi and Rinvoq have collectively made up for lost Humira revenue. The company also raised revenue forecasts on the two drugs by $4 billion to $31 billion-a-year by 2027. The earnings report showed Abbvie has replaced the Humira revenue and is poised for solid earnings growth.
At a new high, there should be a time in the coming days or weeks when a covered call makes sense.
Recommended Action: Buy ABBV.
