5 Best Weight Loss Stocks To Invest In

In this article, we will be taking a look at the 5 best weight loss stocks to invest in. To read our detailed analysis of new developments in the weight loss industry, you can go directly to see the 11 Best Weight Loss Stocks To Invest In.

5. Viking Therapeutics, Inc. (NASDAQ:VKTX)

Number of Hedge Fund Holders: 28

Viking Therapeutics, Inc. (NASDAQ:VKTX) is a biotechnology company that has joined the obesity drug race and is manufacturing experimental weight loss drugs such as the VK2735. It is based in San Diego, California.

Stifel’s Annabel Samimy reiterated a Buy rating and a $30 price target on Viking Therapeutics, Inc. (NASDAQ:VKTX) shares on August 8.

There were 28 hedge funds long Viking Therapeutics, Inc. (NASDAQ:VKTX) in the second quarter, with a total stake value of $221.9 million.

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

Number of Hedge Fund Holders: 43

Novo Nordisk A/S (NYSE:NVO) had 43 hedge funds long its stock in the second quarter, with a total stake value of $778.9 million.

Novo Nordisk A/S (NYSE:NVO) is a pharmaceutical company operating through its Diabetes and Obesity Care and Rare Disease segments. It produces two leading obesity treatments, Wegovy and Saxenda, which are hormonal treatments that regulate appetite.

Here’s what Rowan Street Capital said about Novo Nordisk A/S (NYSE:NVO) in its first-half 2023 investor letter:

“Our current portfolio is made up of just 10 companies — we are very focused! We described our ‘10-Player All-Star Team’ philosophy in our Q1 2018 Letter (we encourage you to review it). We have been building this portfolio since our founding in 2015. In total, over the past 8 years, we bought stock in 47 different companies (that’s ~6 per year), and obviously, for anyone who is good at arithmetic, we sold 37 of them (~4.6 per year). We are constantly trying to learn from every decision (good or bad) that we make. We went through every position that we’ve sold since 2015 and analyzed how we would have done had we held on to those positions. The top 3 performing positions would have been: Chipotle (CMG) +630%, Tractor Supply (TSCO) +315% and Novo Nordisk A/S (NYSE:NVO) +387%. Your managers are at fault here because we sold all of these (in 2017-18) for non-fundamental reasons. All of these continued to be great businesses and management has executed at very high levels. In all three cases, we made a decision to sell because we thought the stock price got way ahead of itself.

Our main take-away lesson has to be Do NOT sell your winners and avoid adding more to your losers. Or as Peter Lynch once famously put it: “Selling your winners and holding your losers is like cutting the flowers and watering the weeds.”

We were fortunate to purchase CMG, TSCO and NVO at very attractive prices when these companies hit a temporary speed bump in their business. These were businesses that were simple to understand and we knew them very well as we had a chance to study them thoroughly for some time prior to our purchase. However, when you choose to sell you get the cash proceeds. First, you have to pay the capital gains tax and then you have to make another ‘buy decision’ or, in a lot of cases, a number of them. The more decisions you make, the higher probability that you will make mistakes. More often than not, you end up buying a business that you know less well and end up partnering with the management team, whose character, management and capital allocation abilities may still be somewhat moot to you. These things take time to get comfortable with! As we have learned many times over throughout our investing careers, it is usually significantly more profitable and also more enjoyable to stay with the great business that you know very well and have a high confidence level in their management team. And this is exactly what happened with CMG, TSCO and NVO. It was a costly mistake for our investors and it’s an extremely valuable lesson that we have learned.”

3. Amgen, Inc. (NASDAQ:AMGN)

Number of Hedge Fund Holders: 57

Amgen, Inc. (NASDAQ:AMGN) is another biotech company on our list. It develops an experimental weight-loss hormone, Leptin, which is proving successful in decreasing users’ appetite to aid weight loss.

Our hedge fund data shows 57 hedge funds long Amgen, Inc. (NASDAQ:AMGN) in the second quarter. Their total stake value was $1.6 billion.

Michael Yee at Jefferies maintains a Buy rating and a $310 price target on Amgen, Inc. (NASDAQ:AMGN) as of August 14.

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

Number of Hedge Fund Holders: 78

Truist’s Robyn Karnauskas maintains a Buy rating and a $122 price target on Merck & Co., Inc. (NYSE:MRK) shares as of August 2.

Merck & Co., Inc. (NYSE:MRK) is another pharmaceutical company on our list. The company offers weight management interventions for employers, hospitals, medical groups, health plans, and patients.

In total, 78 hedge funds were long Merck & Co., Inc. (NYSE:MRK) in the second quarter, with a total stake value of $2.7 billion.

Baron Funds said the following about Merck & Co., Inc. (NYSE:MRK) in its second-quarter 2023 investor letter:

“During the second quarter, Merck & Co., Inc. (NYSE:MRK) filed the first lawsuit (followed by the filing of additional lawsuits by other parties) against the federal government challenging the constitutionality of the Medicare Drug Price Negotiation Program (the Program) that Congress established as part of the Inflation Reduction Act. In Merck’s complaint, Merck argues that the Program violates the Fifth Amendment because it allows the federal government to take Merck’s innovative drugs without providing just compensation for them. In addition, Merck argues the Program violates the First Amendment because it forces them to sign an agreement saying the government mandated prices are fair and the result of a negotiation when in fact, Merck argues, prices are not negotiated or fair. These lawsuits will take time to work their way through the legal process and in the meantime, the Program moves ahead on its scheduled path. The consensus view is that these lawsuits will not be successful, and the Program will remain in place. We suspect Merck’s arguments may convince at least a few U.S. Supreme Court Justices when the case reaches the U.S. Supreme Court, but the ultimate outcome is impossible to predict. For now, we assume the Program will remain in place and invest with that framework in mind.”

1. Eli Lilly and Company (NYSE:LLY)

Number of Hedge Fund Holders: 87

Eli Lilly and Company (NYSE:LLY) is a pharmaceutical company. It offers one of the most successful and popular weight loss drugs, Mounjaro, which is primarily a diabetes drug.

Eli Lilly and Company (NYSE:LLY) was seen in the portfolios of 87 hedge funds in the second quarter. Their total stake value was $5.1 billion.

Cantor Fitzgerald’s Louise Chen reiterated an Overweight rating and a $550 price target on Eli Lilly and Company (NYSE:LLY) on August 9.

This is what Baron Funds said about Eli Lilly and Company (NYSE:LLY) in its second-quarter 2023 investor letter:

“Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company developing and marketing drugs in oncology, diabetes, Alzheimers, immunology, and other diseases. Shares climbed due to continued investor excitement around novel weight loss drugs in the GLP-1 class, including Lilly’s Mounjaro. Given demand that is orders of magnitude more than supply, the full potential of the GLP-1 class of drugs remains unclear, with sales projections eclipsing $100 billion. This number would set a new industry record by a large margin. Drug development in this space is understandably fierce, and as recently as late June, Eli Lilly revealed new data from its diabetes/obesity pipeline assets that will further enhance the value proposition offered to patients. We retain conviction.

In pharmaceuticals, our largest investment continues to be in Eli Lilly and Company. Lilly’s new diabetes drug Mounjaro is on track to be FDA approved for obesity in 2023. At a medical conference in June, Lilly announced Phase 2 clinical data for a next-generation obesity drug called retatrutide, which showed the drug achieved up to 17.5% mean weight loss at 24 weeks in adults with obesity and up to 24.2% mean weight loss at 48 weeks. Lilly also announced Phase 2 clinical data showing its once daily oral drug orforglipron achieved up to 14.7% mean weight loss at 36 weeks in adults with obesity. The results from these pipeline obesity medicines confirmed Lilly’s status as a market leader in the diabetes and obesity category. Also during the quarter, Lilly announced that its drug Donanemab slowed cognitive and functional decline in a Phase 3 study in people with early symptomatic Alzheimer’s disease. We continue to think the company should be able to grow revenue and earnings at attractive rates through the end of the decade and beyond.”

See also 15 Best Diets in 2023 and 10 Best Fitness and Gym Stocks To Buy Now.