13 Best Quality Stocks To Buy

8. Eli Lilly and Company (NYSE:LLY)

Number of Hedge Fund Shareholders In Q1 2024: 109

Pharma giant Eli Lilly and Company (NYSE:LLY) is making the waves with its weight loss drugs. Its shares are up by 38% year to date, and the future might be very bright for Eli Lilly and Company (NYSE:LLY) if we believe a recent report from Goldman Sachs. This expects the weight loss drug market to sit at a whopping $130 billion by 2023 end, allowing Eli Lilly and Company (NYSE:LLY) to potentially double its current revenue even if it captured just 20% of the market.

During Q1 2024, 109 hedge funds part of Insider Monkey’s database had bought a stake in Eli Lilly and Company (NYSE:LLY). Ken Fisher’s Fisher Asset Management held the largest stake which was worth $3.6 billion.

Baron Health Care Fund cited confidence in Eli Lilly and Company (NYSE:LLY) financials and business model in its Q1 2024 investor letter. The fund’s managers believe that the company is well positioned to grow over the next couple of years. They outlined:

Eli Lilly and Company 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.

The fund added that it was “positive about the company’s long-term outlook” despite reducing its position during the quarter because of valuation changes.

Eli Lilly and Company (NYSE:LLY)’s forward P/E ratio of 59.88 shows heightened expectations towards LLY’s earnings growth rate. Additionally, while its revenue has grown by 38% over the past four years, the stock is up by 522% as investors have piled into the hype for weight loss drugs. Considering future weight loss drug market estimates and Eli Lilly and Company (NYSE:LLY)’s revenue, it appears that LLY’s share price already reflects a lot of the expected future growth in revenues.