We recently published a list of 10 Best Stocks to Buy According to Billionaire Ken Fisher. In this article, we are going to take a look at where Eli Lilly and Company (NYSE:LLY) stands against other best stocks to buy according to Billionaire Ken Fisher.
Ken Fisher is a prominent American investor and financial analyst, known for founding Fisher Investments in 1979. Born in San Francisco in 1950, he is the son of influential stock investor Philip A. Fisher. Fisher graduated from Humboldt State University with a degree in economics in 1972. He began his career in investment management and quickly made a name for himself through innovative approaches to investment theory.
Under Fisher’s leadership, the firm has been recognized for its investment strategies and has consistently ranked among the top investment advisers in the U.S. For several years, Fisher Investments has been included in the Financial Times’ list of top Registered Investment Advisors. Fisher is also a best-selling author, having written multiple books on investment strategies, and he is known for popularizing concepts like the Price-to-Sales ratio as a tool for stock analysis
Understanding Bull Markets and the Role of Technology in Investment Strategies
Ken Fisher talked about the markets in a September 2024 video that was posted on his firm’s YouTube channel, Fisher Investments, and mentioned that he frequently gets asked about which sectors he believes will outperform or underperform over the next 18 months. He currently sees the market in the later stages, though not at the end, of a somewhat unusual bull market shaped by the unique challenges since COVID-19 began. As this bull market nears its two-year mark in October, he observes that while major trends may not shift significantly in the immediate future, technology stocks have consistently outperformed non-tech stocks since the market began to recover from the pandemic.
Fisher noted that, when the market sees substantial movement, up or down by half a percent or more, technology stocks tend to follow that trend more intensely. Thus, if the market is expected to rise, tech stocks will likely perform well; conversely, they often lag during market downturns.
Ken Fisher Predicts Shift as Value Stocks Begin to Outperform Growth Amid Fed Rate Speculations
Ken Fisher noted that as 2024 progressed, he expected value stocks to begin outperforming growth stocks more than they had in the past. While this expectation did not materialize in the first and second quarters, he observed that the trend started to emerge in the third quarter. However, he was surprised to see that energy stocks continued to underperform compared to most value stocks.
“As 2024 progressed, and as I said in prior videos early in the year, I expected value to start doing better relative to growth than it had been before. And that didn’t really much happen in the first and second quarters. But in the third quarter of 2024, that’s largely happened, with the exception of the fact that energy, and I was completely wrong about this, energy has continued to do worse than most value.”
Additionally, Fisher said that initially when the Fed began raising rates in 2022, many thought this would negatively impact growth stocks, a narrative he consistently disagreed with. Now, the sentiment is shifting again, suggesting that central bank rate cuts will benefit value stocks while adversely affecting growth stocks. This shift is logical because value stocks are more reliant on bank financing compared to growth stocks, which have various funding sources.
As short-term interest rates decline relative to long-term rates and banks become more willing to lend, this scenario favors value stocks. Consequently, Fisher anticipates that the trend of value stocks narrowing the gap with growth stocks, seen in the third quarter, will continue into the fourth quarter and throughout much of the next year.
Our Methodology
This article explores the top ten stock holdings of Fisher Asset Management, based on 13F filings as of Q2 2024. The stocks are arranged in ascending order according to the stake of Fisher Asset Management, as of June 30, 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An array of pharmaceutical pills with the company’s logo on the bottle.
Eli Lilly and Company (NYSE:LLY)
Total Number of Shares Owned: 4,888,710
Total Value of Shares Owned: $4,426,141,743
Number of Hedge Fund Investors: 100
Eli Lilly and Company (NYSE:LLY), a pharmaceutical leader in treatments for diabetes, cancer, and other serious conditions, is well-positioned for growth with a robust pipeline targeting diabetes, cancer, and neurodegenerative diseases. The success of Mounjaro solidifies Eli Lilly’s leadership in diabetes care and positions it to capitalize on the rising demand for obesity management, a rapidly expanding area with limited competition.
Additionally, Eli Lilly and Company (NYSE:LLY) has multiple promising therapies in late-stage clinical trials, which could further accelerate growth. Strategic partnerships with biotech firms enhance Eli Lilly and Company (NYSE:LLY)’s research capabilities and expedite the development of innovative therapies, keeping it at the forefront of medical advancements.
As healthcare systems increasingly prioritize effective chronic disease treatments, Eli Lilly and Company (NYSE:LLY)’s product portfolio aligns well with this trend toward health and wellness. In Q3 2024, Eli Lilly and Company (NYSE:LLY) reported a normalized EPS of $1.18, missing estimates by $0.29, and GAAP EPS of $1.07, falling short by $0.47. Revenue reached $11.44 billion, underperforming forecasts by $679.5 million.
Looking ahead, analysts anticipate a significant rebound in Q4, with a projected normalized EPS of $5.48 and revenue of $14.00 billion. Over the last 90 days, Eli Lilly and Company (NYSE:LLY) has received 19 upward EPS revisions, signaling increased confidence in its strong future performance.
PGIM Jennison Health Sciences Fund stated the following regarding Eli Lilly and Company (NYSE:LLY) in its Q2 2024 investor letter:
“Eli Lilly and Company (NYSE:LLY) is a diversified biopharmaceutical company with core franchises in Diabetes, Obesity, Immunology, Neurodegeneration, and Oncology. The company is one of the two global leaders in diabetes with blockbuster products in Trulicity and recently launched Mounjaro (tirzepatide) to serve this large underserved market. To date, the Mounjaro launch is the strongest for any diabetes drug ever launched, which we attribute to off label usage in the obesity indication as well as on label use in diabetes.
We believe the tirzepatide (the generic name for Mounjaro) franchise is also uniquely positioned to grow substantially from here thanks to its recent approval for obesity. To that note, in late 2023, Eli Lilly received approval for tirzepatide in obesity and is commercializing it for obesity under a new brand name, Zepbound. While still early in the launch, uptake has been extremely strong, exceeding that of both Wegovy and Mounjaro at the same timepoint in their launches.
While Alzheimer’s Disease has been a tough market for drug developers, Eli Lilly has breakthrough designation from the food and drug administration (FDA) for donanemab and recently presented Phase III pivotal trial data that positions donanemab as the most efficacious drug in the class. In June, the FDA advisory committee voted unanimously in favor of donanemab as an effective treatment where the benefits outweigh the risks, praising the therapy as innovative. Donanemab was then approved under the brand name Kisunla in early July…” (Click here to see more…)
Overall, LLY ranks 7th on our list of best stocks to buy according to Billionaire Ken Fisher. While we acknowledge the potential of LLY, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LLY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.