10 Best Healthcare Stocks to Buy According to Hedge Funds

2. Eli Lilly & Company (NYSE:LLY)

Number of Hedge Fund Holders: 109

As a major pharmaceutical player, Eli Lilly & Company (NYSE:LLY), develops medications for diabetes, cancer, and other conditions such as migraines and arthritis. Operating since 1876, the company is headquartered in Indianapolis, Indiana.

Eli Lilly & Company (NYSE:LLY)’s Q1 2024 performance was strong, with revenue rising 26% year-on-year thanks to a few key drugs. The company also made significant pipeline progress with positive trial results and new drug submissions. Furthermore, Eli Lilly & Company’s (NYSE:LLY) raised its full-year revenue and EPS guidance by $2.0 billion and $1.25, respectively.

Eli Lilly & Company (NYSE:LLY) is a hot healthcare stock due to its dominance in weight-loss drugs (GLP-1). This booming market justifies its high valuation, and analysts are bullish on the stock, giving it a “Strong Buy” rating.

Here’s what Baron Funds said about Eli Lilly & Company (NYSE:LLY) in its Q1 2024 investor letter:

“Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company that discovers, develops, manufactures, and sells medicines in the categories of diabetes, oncology, neuroscience, and immunology, among other areas. Stock performance was strong due to robust fourth quarter sales of Mounjaro/ Zepbound, better-than-anticipated initial guidance for fiscal year 2024, and ongoing enthusiasm surrounding the company’s obesity and diabetes franchises. We continue to think Lilly is well positioned to grow revenue and earnings at attractive rates through the end of the decade and beyond.”

Of the 919 hedge funds being tracked by Insider Monkey as of Q1 2024, 109 funds reported owning a stake in Eli Lilly & Company (NYSE:LLY). The company ranks second on our list of the best healthcare stocks to buy now.