Novo-Nordisk (NVO)

Lead in diabetes and insulin drugs, but recently face strong competition from Eli Lilly, which has cratered their own stock. LLY trades at 50x PE vs. NVO 14x. NVO is being unfairly punished due to competitive threats. They replaced the CEO and board. Obesity effects 1 million worldwide, but only 5% use weight-loss Drugs. NVO and LLY will continue their duopoloy and grow.

The first thing he sees in the chart is a downtrend. Biotech is lagging the benchmarks. If it breaks $42, the downtrend will continue. Look for a higher low before stepping in.

Trump is trying to get the prices down in pharmaceuticals. The market is growing in double digits. He has owned this stock for a long time and trimmed several times.  The only real incentive in the stock was a recent alzheimer drug.  He sold it for another company which has been a winner. However if it gets much cheaper he would buy.

Down today on the Alzheimer's news (their drug doesn't work well); but the street always felt this drug was a lottery ticket. Pays a 3.4% dividend yield. Ozempic is a good brand name; prices will be lower in the US next year, so volume will increase. Can buy it now. 

There always seems to be some 'problem' occurring with the company, and it is behind peers in several areas. The stock is cheap, but it has been a value trap for some time. EPS growth is expected to very low in the next two years and it has cut guidance four times this year. We think we would wait until the New Year on this one. We imagine it sees more selling, or at best a drift down, for a while yet.
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There always seems to be some 'problem' occurring with the company, and it is behind peers in several areas. The stock is cheap, but it has been a value trap for some time. EPS growth is expected to very low in the next two years and it has cut guidance four times this year. We think we would wait until the New Year on this one. We imagine it sees more selling, or at best a drift down, for a while yet.
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Down about 55% from peak. Challenges and headwinds for all of pharma right now. Be wary. Tariffs, FDA, pricing issues (cut prices to access US Medicare and Medicaid), competition (from LLY, but also as patents expire). CEO let go. Missed filing Canadian patent protection documents. Head of FDA doesn't like vaccines.

Now trades at level that's half decent, but wouldn't buy more right now. Weight-loss business still has room to grow, but the question is how much percentage-wise will NVO participate? Pricing power will determine how the stock price is going to go. Still a decent company. 

Not enough tailwinds to step in. If you own and have patience, can hold. Dead money for now.

Give the new CEO time to settle in. Shares have been slipping. Sell at the mid-50s. Eli Lilly is best in this space.

Another one ripe for tax-loss selling. In a downtrend of lower highs and lower lows. Until that ends, don't buy. Chart gives slight indication that it could be the beginning of a base. He'd want to see more up-and-down consolidation and then a breakout. But that's a ways off.

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.

It does really well with metabolic syndrome chronic diseases, eg Diabetes and has leadership in this area.There have been disappointments in the earnings cycle so it is at a 52 week low. The market only rewards companies that have been executing and Novo hasn't. It could recover however so he is on the sidelines to wait and see.

Falling rapidly after a great run. Price is below 200-day MA. Valuations look somewhat attractive, but sentiment remains pretty rough. 14x forward PE for 8-10% growth. Guided lower for the year. 

Great long-term catalysts, as Wegovy shows strength in treating obesity, diabetes, heart attacks, stroke, and liver disease. But it's all about patent cliffs, pricing risks, and competition.

There are worried about generic weight-loss drugs coming. Pharmaceuticals are like fads and fashions, hard to know where the market will be. He avoids pharma.

It was the biggest European company last year. This and LLY are growing double digits and the market is growing double digits. Has owned NVO 9 years and trimmed it 7 times, and this is the first time he's bought more, on weakness. Obesity and diabetes are not going away. 

The key drug is its weight-loss one, a class of drugs he believes in and feels will be the biggest drug on the world ever, worth $120 billion in 2030. Huge growth. These drugs offer cardio benefits in addition to weight-loss. He prefers LLY.