2 Expensive Stocks I'd Definitely Avoid

By Newsfeedback@Fool Com (David Jagielski)5 days ago

Investing based on short-term trends can be dangerous. Throw some high valuations into the mix, and you could have a recipe for disaster. That's what I see when looking at two stocks: Ocugen (NASDAQ:OCGN) and Peloton(NASDAQ:PTON).

Not only are these both extremely expensive investments, but I'm also concerned about what their futures will look like in a post-pandemic world when life goes back to normal. Although both stocks have outperformed the markets over the past year, these are not investments that I would consider buying today.

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1. Ocugen

Ocugen came out of nowhere this year, and it was only news that it was partnering with Indian company Bharat Biotech on a COVID-19 vaccine that gained Ocugen investor attention. Investors are even more excited after the companies announced in April that their vaccine (COVAXIN) was 100% effective against severe COVID-19 cases. Shares of Ocugen are now up nearly 750% since the start of the year (the S&P 500 has risen by just 11%).

But here's the problem: The U.S. may already have all the vaccines it needs. And according to the deal the two companies announced in February, Ocugen will get 45% of the profits the vaccine generates in the U.S. market. As of April 29, 30% of people in the U.S. are now fully vaccinated, and 43% have received at least one dose of a vaccine.

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