Stan Wong Novo-Nordisk NVO-N PAST TOP PICK Apr 10, 2025

Removed from his portfolio not long ago on a stop loss. Long term, secular growth of anti-obesity drugs is still strong. Short-term, cyclical challenges. Quite leveraged to anti-obesity and diabetes, but LLY is more diversified.

Once negative sentiment dissipates, could see him getting back in. About 20-25% earnings growth, trading at 22x, so PEG is just under 1. Value is there, but sentiment not in its favour right now.

It is the largest player in obesity drugs which includes Ozempic. A large percentage of the population in North America are overweight and this condition causes chronic diseases. Therefore obesity drugs help to bring down costs to treat these chronic diseases. The stock price  has fallen because of an over-reaction to an announcement. It is a great franchise and has other businesses. The NOVO foundation owns the majority of shares and can't be taken over.         Buy 7  Hold 4  Sell 1

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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Is -17% this year and -42% the past year. It went too far too fast. He's been buying more on the way down, because obesity won't change, so their weight-loss drug will keep selling. Tariffs: NVO has facilities in the US already. 60% of revenues are outside North America (vs. Eli Lilly's 60% within US). To extend patent protection, a pharma company just needs to change its formula every 3 years to extend the patent protection. There will be competition, but NVO has brand recognition and scale.

Now a whole slew of competitors in the weight-loss space. He'd prefer a more diversified pharma company.

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