Eli Lilly & Co. (LLY)

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. 

Agrees with this call. Obesity drugs remain a big opportunity within healthcare, a $100-billion market by 2030, says Goldman; half the world's population would qualify by then. True, LLY is expensive at 55x forward PE, he still likes and owns this. He may trim at a higher price.

Their popular obesity drug is like AI--a lot is already priced in, though the obesity drug may be applicable to other ailments.

Big difference between a company and a stock. It's like buying a jacket for different price points of $1000, $300, or on sale for $150. You make an investment/purchase decision. 

LLY and NVO are great companies, but you have to look at how expensive they are. Quite expensive at around 50x earnings. Good growth rates. A reasonable multiple for a drug company is sub-20x, and these won't get there via discounted cashflow until next decade. That's a long way out.

He looks for things that have yet to be priced properly. He owns MRK.

The fundamental story is compelling, enjoying momentum and a technical breakout, but it could pause before it resumes its climb.

A drug approval was delayed and shares are down only 2% today. If there's a market correction, LLY will also fall. But their fundamental story has not changed and he still believes in it.

Was upgraded today. It trades like a biotech. The response to their strong earnings on Feb. 6 has been purely positive, rallying. The catalyst are the momentum funds buying this which have a 5% weighting in LLY. Also, the fundamentals are in place.

There's a huge market for the weight-loss drug. Also, LLY has a strong drug pipeline: ulcerative colitis, Alzheimer's, for instance. 

Appreciates what it's done. Trades north of 50x current earnings, expected growth rate is pretty exciting. Ask yourself: is it worth paying up, when peers are trading around 15x? He'd look at AMGN.

It reports Tuesday. It comes down to their weight-loss drug sales. How quickly can they rump in production of it in their factories to meet demand?

Is up 83% in the past year. Their hit weight-loss drug is in such demand that you can't find it in New York City. Buy some tomorrow, then buy more at a 5% downturn.