We recently published an article titled, Jim Cramer is Talking About These 12 Stocks. In this article, we are going to take a look at where Eli Lilly and Company (NYSE:LLY) stands against the other stocks that Jim Cramer has talked about.
During September 30’s episode of Mad Money, CNBC’s Jim Cramer delved into the previous three months and the market’s events. He identified some positive developments amidst the turbulence in the market.
Cramer highlighted that Dow inched up 17%, the S&P 500 went up 42% while Nasdaq gained 38% during the months. He remarked, “For once, good news was actually good news and interesting.” He went on to say that miracles still happened in the stock market’s third quarter. He pointed out that July, August, and September yielded remarkable returns, even highlighting the typically troublesome month of September, which saw the broader market rising significantly.
Cramer elaborated on the lead-up to the Federal Reserve’s decision to cut rates by 50 basis points. He characterized the economic landscape as having “no landing at all,” explaining that the economy continued to grow, inflation decreased, and unemployment ticked up. He suggested that the central bank laid the groundwork for a significant rate cut, which was the reason that there was no panic on Wall Street after the cut. The former hedge fund manager also praised Federal Reserve Chair Jerome Powell for achieving the challenging feat of a double rate cut without shocking the markets.
Moving on, Cramer talked about how the market’s breadth expanded as well, with many sectors gaining traction beyond the dominant Magnificent Seven tech stocks. He noted that a variety of industries, including banks, utilities, retail, healthcare, housing, and transportation, enjoyed their moment in the spotlight.
As for the upcoming election, he referenced Michael Cembalest of J.P. Morgan Asset Management, who described it as “the most polarized election in 100 years.” Cramer observed that, despite the political drama surrounding the elections, Wall Street remained largely unfazed, even in response to significant events like Vice President Kamala Harris potentially replacing President Biden on the Democratic ticket and the attempted assassination of former President Donald Trump.
Cramer also highlighted a shift in the housing market, pointing out the first signs of relief from formerly soaring inflation figures. He suggested that an increase in available homes could be the breakthrough needed to address this intractable asset class that has resisted price declines.
In terms of international markets, he noted that the Chinese market staged a rally, even in light of dismal economic news, owing some of this movement to government-ordered buybacks and influxes of capital.
Cramer commented on the ongoing speculation about stagflation, particularly concerning oil prices, reminiscent of the oil crisis in 1973. He addressed the ongoing conflict in the Middle East, mentioning that Saudi Arabia had abandoned its unofficial price target of $100 per barrel in favor of increasing production.
While many believe that oil prices could soar at any moment, Cramer expressed skepticism, suggesting that although a spike could still occur due to geopolitical factors, he thinks those fears may be overstated.
Reflecting on the past nine months, he concluded that despite the potential for stagflation, 2024 has surprisingly turned out to be a great year for the stock market, defying expectations.
Our Methodology
For this article, we compiled a list of 12 stocks that Jim Cramer mentioned during his episode of Mad Money on September 30. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 900 hedge funds.
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).
Jim Cramer Remains Steadfast On Eli Lilly and Company (NYSE:LLY)
Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 100
Cramer remains steadfast on Eli Lilly and Company (NYSE:LLY) as per Mad Money’s episode on September 30. Despite there being competitors, he believes that “you can’t really compete against a company with that amount of firepower.”
It is a prominent global pharmaceutical company dedicated to discovering, developing, and marketing medications that address significant health issues. The company is actively working to redefine diabetes care, tackle obesity and its severe long-term consequences, advance treatments for Alzheimer’s disease, and provide new approaches for challenging immune system disorders and different types of cancers.
The company has established a manufacturing presence with facilities in nine countries. Cramer highlighted that “what’s going to matter with Lilly is the moat it has by building these gigantic factories.”
In 2023, Eli Lilly (NYSE:LLY) announced a substantial investment of €2.3 billion to significantly expand its operations in Germany. The expansion is part of a larger plan to advance manufacturing capabilities, which has become a top priority for the management.
Earlier in May, it revealed an additional $5.3 billion investment in its manufacturing sites in Lebanon, Indiana, bringing the total investment there to an impressive $9 billion. Since 2020, the company has committed over $18 billion to build, upgrade, or acquire manufacturing facilities in both the U.S. and Europe.
Cramer also made note of the fact that the “stock climbed on overwhelming orders for GLP-1 drugs.” The expansion seeks to boost the production of essential ingredients for key products like Zepbound and Mounjaro.
The company launched Zepbound, a groundbreaking treatment for obesity that activates specific hormone receptors, marking a new approach in the market. Mounjaro, another innovative product, is the first approved medication for type 2 diabetes that targets these same receptors.
In the second quarter, Eli Lilly (NYSE:LLY) reported a remarkable 36% increase in revenue, largely driven by the success of Mounjaro, Zepbound, and Verzenio. The revenue from new products surged from $3.46 billion to $4.46 billion, which was owed to Mounjaro and Zepbound.
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.”
Overall, LLY ranks 1st on our list of stocks Jim Cramer is talking about. While we acknowledge the potential of 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 more promising than LLY 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.
