In this first-round matchup, the well-established pharmaceutical powerhouse matches up with the up-and-coming cryptocurrency exchange.
March 7, 2023
Welcome to our 7investing March Madness competition! Throughout this campaign, we’re matching popular stocks up against one another to determine which will be the best investment over the next three years. And then, by voting in the poll at the bottom of the article, you can help us determine which stock will go on to the next round!
Our rankings are determined by the total return of the stock during calendar 2022. The highest-ranked stock had the best overall return of those in our tournament, and our lowest-ranked stock had the lowest overall return.
In this first-round matchup, the second-seed pharmaceutical powerhouse AbbVie (NYSE: ABBV) is up against the cryptocurrency exchange Coinbase (NASDAQ: COIN). AbbVie’s stock returned 23% in 2022, while Coinbase’s stock fell (86%).
But past performance is not predictive of future returns. Which of these stocks do you believe will provide investors with the best forward three-year return? Read our investing thesis and cast your vote in the poll below!
Our Market Madness tournament is in support of our new 7investing Starter membership, which we are giving away free during the entire month of March. To get started with Starter — and to see how it’s already beating the market by 20 percentage points — click here to automatically apply your “madness” promo code.
Advisor Coverage: Dana Abramovitz
Ranked the 5th largest pharmaceutical company in the world by revenue, AbbVie has earned its position in the 7investing’s “Sweet Sixteen.” The company was formed in 2013 when Abbott Laboratories (NYSE: ABT) chose to separate its medical device business from its pharmaceutical business. The company has a winning lineup of recognized brands in five different business units: Immunology, Oncology, Neuroscience, Aesthetics, and Eye Care (through its acquisition of Allergan in 2020.) The roster includes Botox, Qulipta, Vraylar, Skyrizi, Rinvoq, Botox Cosmetic, and Juvederm.
But AbbVie’s All Star has been Humira. This immunosuppressant drug is approved to treat arthritis, plaque psoriasis, ankylosing spondylitis, Crohn’s disease, and ulcerative colitis. This treatment scored the company over $21B in revenue in 2022. The drug was approved for commercialization in 2002 so it has been playing ball for over 20 years and is getting close to its patent retiring. Competition from biosimilars is expected to hit the court this summer. While this will certainly impact AbbVie’s offensive drive, it does have a strong bench with many candidates in its therapeutic pipeline. Skyrizi and Rinvoq are looking to be next in line to co-captain the team. The company expects the combined efforts to exceed Humira’s $21B greatness.
AbbVie has a mature team of therapeutics and a roster of rookies that open it to new opportunities. The company isn’t all about the offense though. It does have strong D, with D being dividend. The company has been paying a dividend since its formation and that dividend has seen consistent growth each year. This combination, led by seasoned Coach, er CEO, Richard A. Gonzalez makes AbbVie a long-term contender for many seasons ahead.
Advisor Coverage: Krzysztof Piekarski
Coinbase offers both a wallet to store cryptocurrencies and a platform for merchants and consumers to conduct transactions using various cryptocurrencies. The company’s goal is to increase global economic freedom and to enable a more fair, accessible, and efficient financial system. It is down 72.5% from its IPO.
The bull case: if crypto economics survive the onslaught of over-leveraged greed, bankruptcies, and unregulated grifting, it promises to upgrade the concept of “money” on a whole ‘nother level, where the middlemen take less of the cut between transactions, and what you see is what you get; that’s a huge upgrade over traditional “trust me” arrangements — think Great Financial Crisis of ’08 and “Too Big Too Fail” exploits — and makes access to capital truly without limits. Think Steph curry hitting threes from pretty much anywhere on the floor.
The bear case is rather gnarly and will hit the net like Shaq’s free throws of yore: if too much capital is lost during the current wild-west stage, and confidence in the entire crypto ecosystem goes bust, Coinbase will keep putting up brick after brick. Does it have enough intellectual capital already invested to survive?
Investors make money when they’re both right and contrarian. Betting on Coinbase today is like betting on Shaq making his free-throws. And yet… how many rings does he have?
Will AbbVie or Coinbase be the better investment for the upcoming three year period? Cast your vote in our live poll below!
Welcome to our @7investing Market Madness tournament!
Which of these two companies will provide the greater investing return over the next 3 years?
— 7investing (@7investing) March 7, 2023
Yesterday’s matchup paired Exxon Mobil (NYSE: XOM) up against Upstart Holdings (NASDAQ: UPST).
Our analysis showed Exxon to be dominant in generating free cash flows from core hydrocarbons, but also less familiar with the world’s rising demand for renewable sources of energy. Upstart is facing stiff headwinds from rising interest rates, yet appears to have a strong enough balance sheet to weather the storm and to undertake several new vertical market.
Upstart ultimately won 71% of the popular vote and will be progressing on to the next round.
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