We recently published a list of 10 Stocks with Consistent Growth to Buy. In this article, we are going to take a look at where Eli Lilly and Company (NYSE:LLY) stands against other stocks with consistent growth to buy.
Currently, financial markets are experiencing a mix of optimism and caution as investors react to changing economic conditions. Many are closely watching trends and data that could impact future growth and stability.
Tom Lee, managing partner and head of research at Fundstrat Global Advisors, recently shared his insights on the current market trends during an interview on CNBC’s ‘Squawk Box’ on October 14. He acknowledged that he underestimated the strength of the market, noting that it has been surprisingly resilient despite expectations of volatility leading up to the 2024 election. Lee highlighted that there is a significant amount of cash—about $6 trillion—sitting on the sidelines, which has contributed to the market’s stability. He observed that many investors had anticipated a recession, but instead, companies have shown strong earnings and resilience.
Lee also mentioned that the Federal Reserve is likely to adopt a supportive stance as inflation data continues to trend toward their 2% target. He believes that regardless of who wins the upcoming election, stocks are likely to perform well in the following year. Lee pointed out that markets tend to thrive on visibility and certainty, suggesting that if one candidate appears to be gaining an advantage, it could lead to a more favorable trading environment before the election. Overall, he remains optimistic about the market’s outlook.
S&P 500 and Dow Reach New Heights Ahead of Election Season
On October 18, both the S&P 500 and the Dow Jones Industrial Average reached new record highs, marking six consecutive weeks of gains for these major indices. As reported by CNBC, the S&P 500 rose by 0.40%, closing at 5,864.67, while the Dow rose by 0.09% and added 36.86 points to close at 43,275.91. The Nasdaq also performed well, increasing 0.63% to close at 18,489.55. This marks the longest winning streak of the year for both the Dow and S&P 500, with notable increases in their overall performance.
As earnings season progresses, over 70 companies in the S&P 500 have reported their results, with about 75% of those companies surpassing expectations. Despite potential market volatility leading up to the upcoming election, some analysts believe that stocks may continue to rise through November.
Rob Williams, a chief investment strategist at Sage Advisory, noted that this trend is unusual for an election year, where markets typically hesitate before improving post-election. He suggested that investors might be optimistic about a possible victory for Republican nominee Donald Trump, whose policies are seen as more favorable for businesses in terms of regulations and taxes.
Methodology
To compile our list of the 10 stocks with consistent growth to buy, we used the Finviz and Yahoo stock screeners. We sorted our results based on market capitalization and picked the top 30 stocks.
Next, we focused on identifying stocks that had demonstrated consistent growth. From the initial list, we narrowed our choices to stocks that have grown their revenue positively over the past 5 years. We further refined our selection to include only those that had positive revenue growth each year in their last five reported annual revenues.
To ensure the reliability of our findings, we consulted reputable sources such as SeekingAlpha, which provided insights into the revenue CAGR over the past five years, and Macrotrends, which offered information on historical annual revenue data. Finally, we have ranked the 10 stocks with consistent growth to buy below in ascending order based on their five-year revenue CAGR.
Additionally, we mentioned the hedge fund sentiment surrounding each stock, which was taken from Insider Monkey’s database of 912 elite hedge funds as of Q2 of 2024.
Why do we care about what hedge funds do? 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)
5-Year Revenue CAGR: 12.42%
Number of Hedge Fund Holders: 100
Eli Lilly and Company (NYSE:LLY) is an American multinational pharmaceutical and medicine company that specializes in developing a wide range of medications that address significant health challenges, including diabetes, obesity, Alzheimer’s disease, immune disorders, and various cancers. The company’s products are marketed in approximately 105 countries and are used by millions of people worldwide. The company operates manufacturing plants in nine countries and invests heavily in research and development to advance its portfolio of life-changing therapies, reflecting its mission to improve global health outcomes.
The company is actively pursuing a robust strategy centered on expanding its product offerings and enhancing its manufacturing capabilities. The company is focusing on addressing significant health issues such as obesity and Alzheimer’s disease, with recent milestones including the FDA approval of Kisunla for Alzheimer’s and the submission of tirzepatide in the U.S. and EU for obstructive sleep apnea. Eli Lilly and Company (NYSE:LLY) is also investing heavily in its pipeline, with 11 new molecules in clinical trials aimed at tackling obesity and other chronic conditions. Additionally, the company recently agreed to acquire Morphic Holding, Inc. to enhance its immunology pipeline with oral integrin therapies, which are designed to treat serious chronic illnesses.
In terms of performance, Eli Lilly and Company (NYSE:LLY) reported impressive results for Q2 2024, achieving a 36% increase in revenue compared to the same period last year. This growth was primarily driven by strong sales of Mounjaro, Zepbound, and Verzenio. Earnings per share rose by 68%, reflecting the successful launch and market demand for these new products. With these achievements, the company has raised its full-year revenue guidance by $3 billion, indicating confidence in its continued growth trajectory.
On October 2, Eli Lilly and Company (NYSE:LLY) also announced a significant investment of $4.5 billion to establish the Lilly Medicine Foundry. This new center for advanced manufacturing and drug development will be located in Lebanon, Indiana, within the LEAP Research and Innovation District. The facility will uniquely combine drug research and manufacturing in one place, allowing Lilly to explore new production methods while increasing the capacity for clinical trial medicines.
LLY is one of the top stocks with consistent growth to buy. Eli Lilly and Company (NYSE:LLY) has managed to grow its revenue at a compound annual growth rate (CAGR) of 12.42% over the past five years.
According to Insider Monkey’s database of over 900 hedge funds, as of Q2 2024, Eli Lilly and Company (NYSE:LLY) was held by 100 hedge funds. Baron Funds stated the following regarding Eli Lilly and Company (NYSE:LLY) in its “Baron Health Care Fund” second quarter 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.”
Overall, LLY ranks 10th on our list of stocks with consistent growth to buy. While we acknowledge the potential of LLY, our conviction lies in the belief that 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.