Novo-Nordisk (NVO)

Bit of concern over sales from Wegovy. Long-term aspects of this name speak to global demographic trends. Aging population, rising obesity rates. These same drugs are used to treat other conditions as well. Still sees 30% growth rate in the weight-loss-treatment industry, and 25% earnings growth rate from NVO. He'd add here.

He holds LLY as well, so he's doing OK ;)

He trimmed his position because drug companies can have a competitor make a patent announcement that takes 20% off their stock. He would buy a half position for new clients on a recent pullback.

All about GLP-1's, obesity drugs taking the world by storm. Population adoption still has a long way to go. Selling off because easy money's been made. But still upside if you have a long-term view. Not a rich valuation for growth profile. Durable lead. If you already hold, go long; if not, don't pile in now.

Leader in both diabetes and weight loss. Those sectors will continue to expand over time. Risks include possible health effects of these drugs, but he sees explosive growth in the meantime. Expected to post 25% earnings growth over the next few years. Trades at 35x PE. Value in this name, such strong growth. Very decent PEG ratio of 1.4x.

See his Top Picks.

They make Ozempic, the big weight-loss drug. Momentum remains strong and will continue. 30% of Americans are obese and another 30% are very overweight with similar numbers in Canada and China, so there's major room to grow. Them and Eli Lilly dominate this market.

Rebates hurt recent numbers. Scripts are still growing in the US. Lots of competition on weight loss, but the other guys are just in Phase 1 or 2. Obesity causes so many problems, so these drugs are just the beginning. Long runway. Yield is 1.5%.

He'd be cautious on it now, selling down as the position increased in a portfolio. Overhang is competitors coming in over next 3-5 years, and the dominant position today may not be so dominant.

Doesn't know them well enough nor their drug pipeline. Yes, their weight-loss drug has done well, but he doesn't own this or LLY. Their valuations have priced in the weight-loss drugs. He prefers Amgen, because their weight-loss drug is under trial and not priced into the stock yet. And it trades at a lower PE than these peers.

Now Europe's most-valuable listed company. Dominant position in growing diabetes and obesity treatment markets. Supplies half the world's insulin. Unprecedented growth. Seeing cardio, kidney and liver benefits from its drugs. Yield is 1%. 

Outpacing broader S&P 500. Technically, very strong. Aging population and rising obesity rates are tailwinds. Seeing ~25% EPS growth rate.

The market for weight-loss drugs is projected to be above $50 billion, but take this with a grain of salt. Every 5 years NVO develops a new drug, since they invest well in R&D, like drugs for type 2 diabetes and weight-loss. Expects further growth and would add shares at these levels.

Both are just too expensive. NVO is riding the wave of Ozempic, and already seeing a slew of competitive drugs to be released in next few years. LLY has been an incredibly well-run business. He could never buy something with a chart that looks like these, he just has to say he missed it and look for something that will generate returns for clients.

Tough thing with pharma is these drugs are massive successes, you get maybe 12 years of patent protection. Then your biggest success becomes your biggest concern as the patent wears off, and you struggle to find something else. It always happens.

Good way to get exposure to healthcare. Quality name that is trading at fair price. 

In the sector, weight loss is the growth area right now. So he'd probably look at LLY and NVO. Those pipelines are probably going to be fairly robust.

Sideways since March. Some short-term indicators are turning down. Double top. Could see a bit more weakness, could come back to $110. Longer term, a great stock in biotech. Healthcare is a secular trend. RSI for 5-6 years has been up, and he doesn't see that changing.

Great company, but expensive. Lots of promise, but high valuation anticipates great success. He thinks they'll be successful, but you have to be sure you're not paying for that in the stock already. He owns AMGN.