Eli Lilly & Co. (LLY)

It rallied today on news that it was buying a biotech; they expand into drugs to treat the inflammatory bowel space. They lead in this space. Unlike their peers in weight-loss drugs, LLY has a strong balance sheet and multi-billion dollar plants that can pump out the drug. Production capacity is the key to beating competition. That's why he hasn't taken profits. In the pipeline includes an Alzheimer's drug.

In an uptrend, higher highs and higher lows. Ideal time to buy or add is when there's a bit of a pullback and stock hits the trendline. Hard to predict 3-5 years for anything these days, but if the trend is up, stay with it.

Both are just too expensive. NVO is riding the wave of Ozempic, and already seeing a slew of competitive drugs to be released in next few years. LLY has been an incredibly well-run business. He could never buy something with a chart that looks like these, he just has to say he missed it and look for something that will generate returns for clients.

Tough thing with pharma is these drugs are massive successes, you get maybe 12 years of patent protection. Then your biggest success becomes your biggest concern as the patent wears off, and you struggle to find something else. It always happens.

The drug sector in RSI rankings has actually weakened, but this one has completely broken away from its sector. That's why it's good to look at RSI not only within groups and groups against each other, but also within the broader universe.

Has done very well on weight loss, plus favourable news on Alzheimer's drug. Hard to buy, especially as a value investor, as it keeps going higher. Trades over 60x PE. Lots of momentum. Expectations very high. History has shown that it's really hard for companies to sustain really strong growth rates for consecutive years and to continuously ramp up margins. Competition always comes in.

She's not a technical fund manager, but if there's a big pullback, you could use technicals to look for an entry point. Have to consider your investment horizon.

In the sector, weight loss is the growth area right now. So he'd probably look at LLY and NVO. Those pipelines are probably going to be fairly robust.

Chart's in an uptrend. Nothing nasty going on. Flattening, pulling back a bit. Good chart. Keep owning, and you could actually add to your position. Healthcare's not doing too badly as a sector.

Valuation has skyrocketed as a beneficiary of GLP-1 drugs, so MRK gets the nod. Good job developing products.

Is doing very well but is risky because it's trading at far higher multiple than its peers. If there's competition in their obesity drug, shares will sink.

Debt-to-equity continues to climb. He rebalanced his portfolio and sold this. Still a good stock that he targets $900 for. It trades like a biotech.

It reports Tuesday. He expects good numbers because their obesity drug keeps selling out, but they can't produce it fast enough which could impair the top and bottom lines.

Obesity space has performed well lately. Has owned stock for around two years. Valuation has continued to improve. Products are very profitable. Demand for new drugs continue to rise. Would recommend keeping at small weight in portfolio - share price very high. Very competitive industry within drug sector. 

It peaked in early March but remains resilient. It benefits from other health companies not announcing news that excites investors. LLY is universally owned.

It's too early to tell what the long-term results of the weight-loss drugs, but short term people are buying them. You need to know a lot of tech and chemistry to understand pharma stocks and he doesn't care to do that. If you believe their drug prices will fall and more people will use them, then these share will rise.

Excellent technical momentum. Highly ranked from technical perspective. Performance very good the past year. Outperforming sector overall. Very skilled management team with strong brand.