5 Best Stocks to Buy Now According to Quant Billionaire Jim Simons’ Fund

1. Novo Nordisk A/S (NYSE:NVO)

Number of Hedge Fund Holders: 27    

Novo Nordisk A/S (NYSE:NVO) is a healthcare firm based in Denmark. Latest securities filings reveal that Renaissance Technologies owned 21 million shares in Novo Nordisk A/S (NYSE:NVO) at the end of the third quarter of 2021 worth $2 billion. 

On November 18, Novo Nordisk A/S (NYSE:NVO) announced that it had agreed to purchase Dicerna Pharmaceuticals in a deal worth $3 billion. The acquisition will help the former advance previous collaborations with the latter into clinical studies through 2022.

At the end of the third quarter of 2021, 27 hedge funds in the database of Insider Monkey held stakes worth $4 billion in Novo Nordisk A/S (NYSE:NVO), up from 20 in the previous quarter worth $3 billion.

In its Q3 2021 investor letter, LRT Capital Management highlighted a few stocks and Novo Nordisk A/S (NYSE:NVO) was one of them. Here is what the fund said:

“Novo Nordisk is the global leader in insulin, which is, sadly, a growing business as more and more people around the world suffer from diabetes. millions of people need daily injections of insulin to stay alive54, a number that, unfortunately, is likely to continue to grow by millions more in the coming decade. It may seem at first glance that insulin should be a commoditized business, after all, it was discovered and synthesized over a hundred years ago, but nothing could be further from the truth. There are many types of insulin and Novo Nordisk has spent billions on R&D over the years to develop new products. On February 11th, the company reported favorable results from a phase-3 trial of Semaglutide, a drug that is currently used for Type 2 diabetes treatment. The study evaluated the use of Semaglutide for weight loss treatment in non-diabetic patients and found a significant impact on weight loss for patients receiving Semaglutide vs. the placebo control group. If Semaglutide is approved for weight loss treatment, we expect it will be meaningfully accretive to the company’s bottom line.

The company’s proprietary product line supports returns on invested capital of over 40%, and while sales growth is relatively slow (+6% annualized CAGR over the past decade), the company’s shares trade at a reasonable valuation of only 22x forward earnings. For a company with an extremely predictable business, high returns on capital, and an easily forecastable future, we believe this to be highly attractive.”

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