5 Best Diabetes Stocks To Buy Now

In this article, we discuss 5 best diabetes stocks to buy now. If you want to see more stocks in this selection, check out 11 Best Diabetes Stocks To Buy Now. 

5. Abbott Laboratories (NYSE:ABT)

Number of Hedge Fund Holders: 62

Abbott Laboratories (NYSE:ABT) is one of the best diabetes stocks to invest in. The healthcare company operates through four segments – Established Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Medical Devices. The Medical Devices segment provides diabetes care products. Abbott Laboratories (NYSE:ABT) raised its full-year 2022 EPS guidance, and the company now expects full-year diluted GAAP EPS of $3.75 to $3.81 and projects adjusted diluted EPS of $5.17 to $5.23, versus a prior guidance of $4.90 and a $5.04 consensus.

On October 26, Mizuho analyst Anthony Petrone assumed coverage of Abbott Laboratories (NYSE:ABT) with a Neutral rating and a $105 price target. The analyst said the Neutral rating balances the benefits of Abbott Laboratories (NYSE:ABT)’s “solid” presence in many of the quickest growing medical technology markets and “fortress” balance sheet against COVID testing and infant formula recall/relaunch headwinds.

According to Insider Monkey’s data, 62 hedge funds were bullish on Abbott Laboratories (NYSE:ABT) at the end of the third quarter of 2022, compared to 61 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with 9.12 million shares worth $883.2 million. 

Diamond Hill Capital made the following comment about Abbott Laboratories (NYSE:ABT) in its Q3 2022 investor letter:

“Also among our bottom contributors were health care products manufacturer Abbott Laboratories (NYSE:ABT), global pharmaceutical company Pfizer, media and technology giant Alphabet, and insurance company American International Group (AIG).

Abbott has been working through a recall of its infant formula brand Similac in the US, which has continued to pressure its share price. Although the recall will impact near-term revenues, we are not concerned about any long-term impacts. We remain optimistic about the company given it is one of the highest quality names in health care, in our view, with a talented management team that makes smart capital allocation decisions. Abbott also has leading health care and consumer franchises with a particularly strong competitive position in its medical device business. The company continues to launch innovative products in key strategic areas (such as diabetes, structural heart, and diagnostics), which should help drive not only revenue growth but margin expansion.”

4. DexCom, Inc. (NASDAQ:DXCM)

Number of Hedge Fund Holders: 62

DexCom, Inc. (NASDAQ:DXCM) is a California-based medical device company, focused on the design, development, and marketing of continuous glucose monitoring systems in the United States and internationally. The company’s Q3 2022 financial results beat on the top and bottom lines. U.S. revenue grew 17%, while international revenue rose 22%. For full-year 2022, DexCom, Inc. (NASDAQ:DXCM) guided to a revenue of $2.88 billion to $2.91 billion, versus a consensus of $2.89 billion. DexCom, Inc. (NASDAQ:DXCM) is one of the best diabetes stocks to consider. 

On October 28, Cowen analyst Joshua Jennings raised the price target on DexCom, Inc. (NASDAQ:DXCM) to $114 from $85 and maintained an Outperform rating on the shares. The analyst noted the company lifted the lower end of its full-year sales guidance and maintained its targets for operating margin and EBITDA.

Among the hedge funds tracked by Insider Monkey, 62 funds were long DexCom, Inc. (NASDAQ:DXCM) at the end of September 2022, up from 56 funds in the prior quarter. Brandon Haley’s Holocene Advisors is a prominent position holder in the company, with 1.7 million shares worth $139.5 million. 

Here is what ClearBridge Large Cap Growth ESG Strategy has to say about DexCom, Inc. (NASDAQ:DXCM) in its Q2 2022 investor letter: 

“Multiple compression has also hurt higher growth health care companies like DexCom (NASDAQ:DXCM), despite its strong fundamentals. We continue to build out the position as we gain greater visibility on the catalysts of accelerating uptake in Type 2 diabetes patients and the launch of its G7 continuous glucose monitor in the U.S. and Europe. DexCom was hurt in the quarter by market speculation that it would acquire a diabetes pump provider, which would be outside of its core competency.”

3. Zealand Pharma A/S (OTC:ZLDPF)

Number of Hedge Fund Holders: N/A

Zealand Pharma A/S (OTC:ZLDPF) is a Denmark-based biotechnology company manufactures and markets peptides-based medicines in Denmark, and its product portfolio includes Dasiglucagon, a diabetes management injection that works by causing the liver to release stored sugar to the blood. 

On September 9, Morgan Stanley analyst Sarita Kapila initiated coverage of Zealand Pharma A/S (OTC:ZLDPF) with an Overweight rating and a DKK 179 price target. The analyst expects short-term pipeline reviews to support share outperformance and sees a positive risk/reward with the market cautious. Zealand Pharma A/S (OTC:ZLDPF) is primarily a three-asset company, with its wholly owned obesity pipeline overlooked, which represents “free” optionality, the analyst wrote in a research note.

2. Eli Lilly and Company (NYSE:LLY)

Number of Hedge Fund Holders: 75

Eli Lilly and Company (NYSE:LLY) is an American manufacturer of human pharmaceuticals. The company provides medicines like Humulin U-500, Jardiance, Trajenta, and Trulicity for diabetes. Eli Lilly and Company (NYSE:LLY) is one of the top diabetes stocks to look out for. 

On October 17, Eli Lilly and Company (NYSE:LLY) declared a quarterly dividend of $0.98 per share, in line with previous. The dividend is payable on December 9, to shareholders of record on November 15. Eli Lilly and Company (NYSE:LLY)’s dividend yield on November 27 came in at 1.07%. 

Berenberg analyst Kerry Holford on November 22 raised the price target on Eli Lilly and Company (NYSE:LLY) to $375 from $345 and kept a Buy rating on the shares. Despite forex headwinds, Eli Lilly and Company (NYSE:LLY)’s “underlying performance remains strong,” the analyst told investors. The analyst said early signs from the Mounjaro diabetes launch are encouraging and a label expansion to include an obesity indication is now anticipated before the end of 2023.

According to Insider Monkey’s Q3 database, Eli Lilly and Company (NYSE:LLY) was part of 75 hedge fund portfolios, compared to 70 in the prior quarter. Arrowstreet Capital held a prominent stake in the company, comprising nearly 2.5 million shares worth $802.8 million. 

Here is what ClearBridge Global Growth Strategy has to say about Eli Lilly and Company (NYSE:LLY) in its Q3 2022 investor letter:

“In the U.S., we initiated a position in pharmaceutical maker Eli Lilly (NYSE:LLY) as it brings out new drug candidates for diabetes and Alzheimer’s disease. New drugs impact diabetes but have also demonstrated significant weight loss for patients who are overweight and have other co-morbidity issues as a result. Lilly is one of the two key players in diabetes care and we believe the potential market opportunity is much higher than the consensus forecasts as we are seeing evidence of accelerating adoption.”

1. Merck & Co., Inc. (NYSE:MRK)

Number of Hedge Fund Holders: 82

Merck & Co., Inc. (NYSE:MRK) operates as a healthcare company worldwide. The company provides human health pharmaceutical products in the areas of oncology, hospital acute care, immunology, neuroscience, virology, cardiovascular, and diabetes. The company raised full-year 2022 worldwide sales guidance to be between $58.5 billion-$59.0 billion, up from the prior outlook of $57.5 billion-$58.5 billion. This reflects full-year growth of 20% to 21%. The consensus revenue estimate came in at $58.46 billion. 

On November 17, Credit Suisse analyst Trung Huynh initiated coverage of Merck & Co., Inc. (NYSE:MRK) with an Outperform rating and a $120 price target, naming it one of his two top ideas on a relative basis among the U.S. large-cap biopharma group. He sees Merck & Co., Inc. (NYSE:MRK) having “low-risk and high short-term growth” with Keytruda growing more than 20% year-over-year, giving the company “ample time” to make up for its loss-of-exclusivity by the end of 2028. The present valuation is not factoring in Merck & Co., Inc. (NYSE:MRK)’s growth profile, the analyst added.

Among the hedge funds tracked by Insider Monkey, 82 funds reported owning stakes in Merck & Co., Inc. (NYSE:MRK) at the end of Q3 2022, compared to 79 funds in the prior quarter. Jim Simons’ Renaissance Technologies is a prominent stakeholder of the company, with 4.5 million shares worth $393 million. 

Here is what Carillon Tower Advisers had to say about Merck & Co., Inc. (NYSE:MRK) in its Q2 2022 investor letter:

“Merck & Co., Inc. (NYSE:MRK) reported a strong first quarter and raised its financial guidance for 2022. The company also continues to benefit from the recent rotation into pharmaceuticals, which historically has been a more defensive industry.”

You can also take a look at 14 Best Agriculture Stocks To Buy Now and 10 Growth Stocks with Upside Potential.