David Driscoll Novo-Nordisk NVO-N BUY ON WEAKNESS Mar 25, 2025

Has owned this a long time, but has trimmed recently. Unfortunately, diabetes is a growing business. Stocks have fallen recently, because supply couldn't meet demand, but the price is attractive and reasonable.

So many companies now with competing weight-loss products. Riding the hype on this one drug, and he'd much prefer more diversification.

Sentiment's pretty rough on this name. Fairly cheap at 22x forward PE, 18% earnings growth. Regulatory scrutiny. Lost a bit of market share to LLY (which he still holds). Below 200-day MA, which is moving down. Growth of GLP-1 drugs is there, so he's keeping an eye on it for future.

Its stock decline is not unique in this market: most growth companies have been hit very very hard, in one of the sharpest sell-offs we have seen in some time. NVO is 19X earnings now, with a 2.90% dividend. The balance sheet is fine and good growth is still expected over the next two years. We would be comfortable owning this and riding out the current market malaise, which will end one of these days (weeks, or months).
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Now a whole slew of competitors in the weight-loss space. He'd prefer a more diversified pharma company.

He's out. Valuation has now become fairly attractive at 16x forward PE for 14-15% growth. Below 200-week MA, troubling. Long term, a name to look at again once things turn around. Losing some market share to LLY.

He prefers Eli Lilly, but shares of NVO have come down enough.

Overvalued to start with, and expectations were high. Small miss on weight loss percentage led to huge drop in stock price. LLY is grabbing more market share. Worry that drugs in US will face tariffs. Buy here, do well in the long run.

Deal to get off injectables and over to tablets. Went up too far, too fast, now has fallen. LLY has 60% of revenues in US, NVO has 60% outside US. Concern is that LLY's product helps people lose more weight. But Type 2 diabetics are still growing worldwide, especially in China and India.

Trades ~16x PE, lowest it's been in almost 20 years. He's buying more. The value is there, and the company's not getting any credit for its weight-loss drug. Don't hold both LLY and NVO, as it's correlation risk.