Novo-Nordisk (NVO)

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.

He's owned this since 2015, trimming 7 times (that's just good risk management). Markets were pushed well ahead of themselves in 2024, and then we saw a big retraction. Fast money has come out of this name. Down ~60%, growing double digits, 16x forward PE (vs. LLY at 43x forward PE). LLY is really strong in the US, but not outside. 

At this valuation, a no-brainer. Again, you make $$ when you buy not when you sell. He's going to wait and see what happens with the CEO position.

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.

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.

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

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.

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

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.

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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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.

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

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.

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

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.