8. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Funds Holding Stakes as of Q2: 100
Market Cap as of September 18, 2024: $861.24 Billion
Eli Lilly and Company (NYSE:LLY) is a healthcare powerhouse and one of the best forever stocks to buy now for exposure to the development of game-changing pharmaceuticals. The company is best known for its diabetes and weight loss drugs that sell billions of dollars.
The company’s edge as one of the best healthcare stocks stems from the fact that new drugs are hitting the market, investments in production are yielding returns, and more clinical studies suggest the potential for increased earnings ahead.
Likewise, Eli Lilly and Company (NYSE:LLY)’s drugs Zepbound and Mounjaro have received approval for treating obesity and type 2 diabetes, respectively, and are expected to strengthen the current revenue base. Both treatments contain the same active component, known as tirzepatide. In the second quarter, Zepbound generated $1.2 billion in revenue, and Mounjaro nearly $3.1 billion, positioning them as top-selling drugs. Analysts expect the drugs to increase sales by $50 billion by 2029.
The company’s continuous research and development efforts to explore new uses for tripeptide suggest a strong likelihood of securing more approvals from health authorities. This could significantly broaden the market potential and lead to further revenue growth, thus allowing the company to generate more shareholder value.
While trading at a premium with a price-to-earnings multiple of 40, it is highly expected of a company of Eli Lilly and Company (NYSE:LLY) caliber with tremendous opportunities for growth backed by a robust pipeline of drugs. Additionally, the company’s ability to generate free cash flow has rewarded investors with a 0.56% dividend yield.
In Q2 2024, 100 hedge funds held stakes in Eli Lilly and Company (NYSE:LLY), with a total investment of $16 billion. Fisher Asset Management was the largest stakeholder, owning nearly 5 million shares.
Here is what Baron Funds, an investment management company, said about Eli Lilly and Company (NYSE:LLY) in its second-quarter 2024 investor letter. “Shares of global pharmaceutical company Eli Lilly and Company (NYSE:LLY) increased on continued investor enthusiasm around GLP-1 drugs for diabetes and obesity. We remain shareholders. Lilly’s Mounjaro/Zepbound not only offers superb blood sugar control for diabetics but can drive 20%-plus weight loss and likely improve cardiovascular outcomes in both diabetic and non-diabetic obese patients. Lilly is developing next generation drugs, including retatrutide, which drives approximately 25% weight loss, and orforglipron, a daily pill that produces approximately 15% weight loss. In the U.S. alone, there are 32 million Type 2 diabetics and an additional 105 million obese patients who we estimate would qualify for GLP-1 drugs. Although supply and access are limited near term, we think GLP-1 drugs will become standard of care for both diabetes and obesity and will become a $150 billion-plus category. We see Lilly setting a high efficacy bar and capturing significant long-term market share. We think the adoption of GLP-1s will drive Lilly to triple total revenue by 2030.”
