Eli Lilly & Co. (LLY)

The street is passing on this because it has a much higher PE now, making it too risky.

Breaking out to new highs. Bit more diversified than NVO, and a bit more stable. Supposed to come out with pill form for weight loss sometime this year. Well above 200-day MA, which is starting to push higher. Prefers this name.

NVO is more focused on 2 areas:  diabetes and weight loss. Recently announced pill version for weight loss, and that's very positive. Valuation's quite cheap. Competitive pricing, regulatory scrutiny. Trades at 17x PE, but earnings growth forecast looks cloudy for next couple of years. Might be building a base, but still a tad below 200-day MA.

Both have signed agreement with US government for expansion in Medicare, albeit with lower pricing.

Weight-loss space is currently a battle between NVO and LLY, though other competitors will arrive on the scene in the next 5-10 years. LLY secured way more capacity than NVO did. LLY executed better, and revenue and sales should grow much faster. 

Huge drop in NVO makes it more interesting, but LLY still has the better growth outlook (including the pill version when it hits the market later this year).

Last 3 months have started to see some improvement in the sector, and almost immediately this name went to a new high. Quickly got extended, and then pulled back to where it broke out. Going through transformation. Massive growth in GLP-1 drugs, which has shifted the company from a boring, steady income earner to a growth stock.

Technically, has broken out of a very nice base. Clearly, a leader in the pharma sector. Sees multiple expansion and earnings growth. Hard to imagine that growth in weight-loss drugs will slow if they can move from injection to oral pill. Poster child for what to own in healthcare. Yield is 0.65%.

(Note the short timeframe.)  Hitting all-time highs. At her original target price, which she's now re-evaluating. Potential of 50% upside from here. Strongest growth story in the healthcare space. Weight-loss and diabetes demand is incredible. Exciting runway. She may take some money off the table here, but still likes it.

Very resilient name, especially compared to peers such as NVO. Global pharma leader -- obesity, diabetes, oncology, neuroscience. Strong pipeline. Strong, expanding global presence. Earnings growth expected to be ~20% going forward. Pricing agreement with Trump administration is a big tailwind. Though some obesity prices are lower because of that, in exchange they get expanded coverage in Medicare. 

Bit overbought at this point, so he'd probably wait for some softness before adding. Long-term secular tailwinds:  aging demographics, rising healthcare spending globally, advances in biotechnology. Yield is 0.58%.

It's developing a pill of the popular weight-loss drug, which would be more popular than injection. Also, the current GLP-1 drugs cause you lose fat and muscle equally. The LLY shot will be more targeted at fat. 

Previously owned both, but sold out of NVO because it's more concentrated in the diabetes and weight loss space. Weight loss has come out of favour somewhat due to competition and generics. NVO's 200-day MA is falling, with stock price falling below that. Earnings growth only 6%. Long term will come back into favour, as it's a big market.

LLY is more diversified, has larger scale. Chart's technical structure is better, though performance has been flat/negative over last 12 months. Price is above 200-day MA. 15% earnings growth.

Their weight-loss drug, he feels, can be used for hypertension, dementia and alcoholism. The stock is stalled because it's clumsy to use (refrigerated, then injected), but LLY is tested a daily pill to replace that. This would expand their market and market cap a lot.

Both bullish and bearish cycles last longer than one would ever expect. Does see a turnaround in the space. This name has a very good franchise with GLP-1 drugs, taking share from NVO. Multiple is low-mid 30s, and he's hoping it'll go a bit lower. He's waiting for a firmer bottoming.

There was a lot of hype in the weight-loss drugs, typical for a new drug (or technology).  This and Novo Nordisk have recently fallen. The future asks, How will they monetize the GLP-1 franchise? An oral application, which will happen in time. Many moving parts in this industry. LLY's PE has fallen from 50x to 35x. Is a hold depending on your overall portfolio and other factors.

A lot of the move down happened this week. Numbers were good -- earnings and revenue beat, guidance was good. Market really homed in on obesity pill disappointment (slightly less efficacy than a competitor's, 10% dropped out due to side effects). Now trades at 24x PE, with 19% growth.

Very cheap, but sentiment has become difficult and challenging. Long term, the demand for diabetes and obesity drugs is still there and will continue to grow. Industry-leading Alzheimer's drug in pipeline as well. Fortress-like balance sheet, really great cashflow. 

Stock collapsed today on good news from NVO trials. Lots of drugs in pipeline for dementia and other illnesses. Step up and buy some more today. Today's drop is just a knee-jerk reaction.

It reports Thursday. Is concerned, given recent awful numbers reported by its GLP-1 competitor, Novo Nordisk. Is LLY taking market share? Are these companies are staying at peak with these drugs? He thinks a little of both. He sold a few shares to take a huge gain.