1. Novo Nordisk A/S (NYSE:NVO)
Stake Value as of Q2 2024: $1,308,265,485
Novo Nordisk A/S (NYSE:NVO) is a global healthcare company, headquartered in Bagsværd near Copenhagen, Denmark. It specializes in the treatment of obesity, diabetes, and other rare diseases. The company markets its products in over 168 countries and employs 48,000 employees around the world. Its medicines, most notably Ozempic, Rybelsus, and Wegovy have helped improve lives of diabetes and obesity patients worldwide.
The company has had an impressive start to the year, reporting a significant 25% increase in its sales and 19% growth in operating profits during the first half of 2024, driven by a 32% surge in GLP-1 sales in diabetes. Insulin sales also expanded 10%, fueled by substantial demand in North America. Sales growth of Novo Nordisk A/S (NYSE:NVO)’s diabetes care products stood at 25%, which was faster than the global diabetes market. It now enjoys a 34.1% share of the global diabetes value market.
GLP-1 continues to lead the weight loss drug market with a value market share of 69%. Novo Nordisk’s Ozempic leads the way with a 46.6% market share. The brand has contributed a 64% increase in the company’s trailing 12-month revenue. Long-term prospects for Ozempic also remain strong with the market for obesity-fighting drugs set to surpass the $100 billion mark by 2030, according to Goldman Sachs.
The company is optimistic about the launch of Wegovy in international markets and expects it to drive sales during the second half of 2024. The drug is used for weight loss in patients who are overweight or obese and are also suffering from other health conditions like hypertension, diabetes, and high cholesterol. Wegovy was approved for use in China in June this year, which has bolstered the bullish sentiment around the stock.
Looking ahead, Novo Nordisk A/S (NYSE:NVO) does expect drug shortages and supply chain constraints to impact product availability across different parts of the world, but the overall outlook for the company is positive. There is consensus among Wall Street analysts on the stock’s Strong Buy rating with a share price upside potential of 21.65%.
According to Insider Monkey’s database for Q2 2024, 67 hedge funds had investments in the company, up from 60 during the first quarter. Novo Nordisk is the best stock to buy from the Renaissance Technologies portfolio, with the hedge fund having a stake of over $1.3 billion in the company, which represents 2.21% of its portfolio.
Overall, NVO ranks first among the Renaissance Technologies Portfolio: 10 Best Stocks To Buy. While we acknowledge the potential of pharmaceutical companies, 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 NVO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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