We recently published a list of the 7 Best Performing Long Term Stocks in 2024. In this article, we are going to take a look at where Insmed Incorporated (NASDAQ:INSM) stands against the other best performing long term stocks in 2024.

After the latest 50 basis point rate cut by the Federal Reserve, the market has been performing well. All of the major market indices have been in the green since then and experts are taking it as a good sign.

We discussed the Fed’s rate cut in our article about the best day trading stocks. Here is an excerpt from the article:

“…the Federal Open Market Committee (FOMC) chose to lower its policy interest rate by 50 basis points, a move intended to ease monetary policy. Powell explained that this action reflects growing confidence that labor market strength can be maintained, while inflation continues to decrease toward the Fed’s target. Powell emphasized the Fed’s flexibility in its approach and noted that future rate changes will depend on incoming data and the evolving economic landscape.

When questioned about the likelihood of future rate cuts, Powell said that each decision would be data-driven and made on a meeting-by-meeting basis. The Summary of Economic Projections (SEP) suggests a federal funds rate of 4.4% by the end of the year, with further reductions expected in the years ahead, which points to expectations of lower inflation and slightly higher unemployment.”

Understanding the Current Stock Market Optimism

Lead writer for Markets Live at The Wall Street Journal, Gunjan Banerji also shares the market’s optimistic sentiment as she explained in an interview with CNBC on September 25. Banerji discussed the growing optimism in the stock market despite ongoing bullish sentiment for the past few years. She highlighted how the recent rate cut by the Federal Reserve boosted market confidence, with the VIX (volatility index) dropping to its lowest levels and other indicators like high-yield bonds and options showing continued belief in the rally.

Dominic Chu of CNBC expressed concerns about potential market overconfidence, given the calmness amid geopolitical risks, the upcoming U.S. presidential election, and consumer spending challenges. Banerji acknowledged these risks but emphasized that much of the market’s optimism is tied to the Fed’s actions, with people reassured by the larger-than-expected rate cut.

Finally, Banerji pointed out a broadening of the market rally beyond the tech sector and mentioned the strong performances in sectors like energy and materials, and record highs from companies like Caterpillar and McDonald’s, which indicates a healthier, more diverse market rally.

Our Methodology

For this article, we used stock screeners to identify nearly 60 mid to mega-cap stocks with year-to-date share price returns of over 100%. Next, we narrowed our list to 7 stocks with the highest average analyst price target upside, as of September 24. We also added the hedge fund sentiment around each stock which was taken from Insider Monkey’s database of over 900 elite hedge funds. The stocks are sorted in ascending order of their upside potential.

Why are we interested in 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).

Insmed Incorporated (NASDAQ:INSM)

Average Analyst Price Target Upside: 19.10%

Stock Price Performance YTD: 142.59%

Number of Hedge Fund Holders: 74

One of the best performing long term stocks, Insmed Incorporated (NASDAQ:INSM) is a biopharmaceutical company dedicated to developing treatments for serious and rare diseases. One of its flagship products, ARIKAYCE, is designed to treat Mycobacterium avium complex lung disease, offering vital support as part of a combination antibacterial regimen for adult patients.

In addition to ARIKAYCE, it is making strides with its pipeline, particularly focusing on brensocatib, an oral medication aimed at treating bronchiectasis and other conditions linked to neutrophil activity. The company is also advancing Treprostinil Palmitil Inhalation Powder, an inhaled treatment for pulmonary hypertension related to interstitial lung disease and pulmonary arterial hypertension.

Recent developments highlight Insmed’s (NASDAQ:INSM) momentum, especially following the encouraging results from the ASPEN study, which evaluated brensocatib in bronchiectasis patients.

The trial met its primary objective and demonstrated that both doses of brensocatib significantly reduced severe lung flare-ups compared to a placebo. Specifically, patients on the lower dose experienced a 21% reduction in flare-ups, while those on the higher dose saw a 19% decrease. Moreover, the study achieved several secondary endpoints, indicating that brensocatib not only lessened acute episodes but also contributed to improvements in overall lung health.

The promising outcomes position the company to file for regulatory approval with the U.S. Food and Drug Administration (FDA) by the end of 2024, with expectations to launch brensocatib in the U.S. by mid-2025, followed by introductions in Europe and Japan.

The potential approval of brensocatib is particularly significant given that there are currently no approved treatments for bronchiectasis.

It opens a substantial market opportunity for Insmed (NASDAQ:INSM), providing a significant therapeutic option for many patients suffering from this condition. Analysts have expressed a favorable outlook for the company. The stock has been given a Buy rating by 17 analysts. The average price target of $86.50 implies an upside of 19.10% to the stock’s current price, as of September 24.

Columbia Acorn Fund stated the following regarding Insmed Incorporated (NASDAQ:INSM) in its Q2 2024 investor letter:

“Insmed Incorporated (NASDAQ:INSM) is a commercial-stage biopharmaceutical company focused primarily on treatments for pulmonary disease. The stock meaningfully outperformed during the quarter following positive Phase III data for its Brensocatib (Brenso) drug in treating non -cystic fibrosis bronchiectasis (NCFB). While the stock has roughly doubled since the beginning of the year, we are maintaining the overweight position as Brenso could be a potential game changer for the company, given a multi-billion-dollar total addressable market and no other approved NCFB therapies on the market.”

Overall, INSM ranks 7th on our list of the best performing long-term stocks in 2024. While we acknowledge the potential of INSM 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 more promising than INSM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.

Disclosure: None. This article is originally published at Insider Monkey.