Baron Funds, an investment management company, released its “Baron Health Care Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund declined 2.55% (Institutional Shares) in the quarter compared to a 1.02% decline for the Russell 3000 Health Care Index (benchmark) and a 3.22% gain for the Russell 3000 Index (the Index). The underperformance in the quarter was due to active sub-industry/market cap weights. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Health Care Fund highlighted stocks like Eli Lilly and Company (NYSE:LLY) in the second quarter 2024 investor letter. Eli Lilly and Company (NYSE:LLY) is a pharmaceutical company, headquartered in Indianapolis, Indiana. The one-month return of Eli Lilly and Company (NYSE:LLY) was -8.98%, and its shares gained 85.20% of their value over the last 52 weeks. On August 1, 2024, Eli Lilly and Company (NYSE:LLY) stock closed at $832.44 per share with a market capitalization of $749.533 billion.
Baron Health Care Fund stated the following regarding Eli Lilly and Company (NYSE:LLY) in its Q2 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.”
An array of pharmaceutical pills with the company’s logo on the bottle.
Eli Lilly and Company (NYSE:LLY) is in 19th position on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 109 hedge fund portfolios held Eli Lilly and Company (NYSE:LLY) at the end of the first quarter which was 102 in the previous quarter. In Q1 2024, Eli Lilly and Company’s (NYSE:LLY) revenue surged by 26%, driven by substantial growth in its new products offerings compared to Q1 2023. While we acknowledge the potential of Eli Lilly and Company (NYSE:LLY) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Eli Lilly and Company (NYSE:LLY) and shared the 10-year returns of former U.S. president Barack Obama’s stock portfolio. Baron Health Care Fund highlighted in the Q1 2024 investor letter that Eli Lilly and Company (NYSE:LLY) rose during the quarter, due to strong Q4 sales, enthusiasm over its obesity and diabetes products, and positive 2024 guidance. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.