Investors often find themselves delaying investment decisions due to excessive analysis, but this doesn’t have to be the norm. Three Motley Fool contributors have pinpointed three unstoppable stocks that they believe warrant immediate attention. These stocks are Eli Lilly (NYSE: LLY), Novo Nordisk (NYSE: NVO), and Vertex Pharmaceuticals (NASDAQ: VRTX). Here’s a breakdown of why they stand out as compelling investment opportunities.
Eli Lilly: Don’t sweat the small stuff
Prosper Junior Bakiny of Eli Lilly acknowledges that no company is immune to challenges, and even high-performing giants like Eli Lilly face regulatory hurdles. Despite the recent setback of the FDA delaying approval for donanemab, a therapy for Alzheimer’s disease, Bakiny believes the market’s reaction was overblown. He argues that Eli Lilly’s portfolio remains robust, with notable assets like tirzepatide (Zepbound) in the weight-loss market and promising new drugs like Jaypirca for cancer and Omvoh for ulcerative colitis. Bakiny emphasizes that Eli Lilly’s success over the past decade isn’t solely reliant on a single drug approval, and the company’s pipeline remains promising. He urges investors not to be deterred by temporary setbacks, reaffirming Eli Lilly as a compelling buy.
Novo Nordisk: Its growth potential just got a huge upgrade
David Jagielski highlights Novo Nordisk as a powerhouse in the healthcare sector, boasting a substantial market cap nearing $600 billion. Unlike competitors striving to break into the weight-loss market, Novo Nordisk already enjoys a strong foothold in both weight loss and diabetes treatment arenas.
With flagship products like Ozempic for diabetes and Wegovy for weight loss, Novo Nordisk’s future appears promising. The recent FDA approval granting Wegovy a new indication to reduce cardiovascular risk in obese or overweight adults further solidifies its position. This dual achievement not only enhances Wegovy’s appeal to healthcare providers but also potentially expands insurance coverage.
In 2023, Novo Nordisk reported impressive financials, with net sales reaching 232.3 billion Danish kroner ($34.8 billion) and a significant increase in both top and bottom lines. Remarkably, while Ozempic saw a robust sales increase of 66%, Wegovy’s growth rate soared even higher at 420%, indicating substantial market potential for these flagship products.
Although Novo Nordisk’s stock may appear pricey with a trading multiple of nearly 50 times earnings, Jagielski asserts that the company’s robust growth trajectory justifies the investment. With considerable growth opportunities on the horizon, Novo Nordisk remains a top pick for investors seeking growth stocks.
Vertex Pharmaceuticals: An easy pick for long-term investors
Keith Speights emphasizes that concerns about growth prospects and valuation often deter investors from buying stocks. However, Vertex Pharmaceuticals doesn’t face these issues.
With a dominant position in cystic fibrosis (CF) therapies and no immediate competition in sight, Vertex enjoys a unique market advantage. Its upcoming vanzacaftor triple-drug combo, expected to secure regulatory approval this summer, promises to be its most lucrative CF therapy yet, further solidifying its growth trajectory.
Moreover, Vertex has successfully diversified beyond CF with Casgevy gaining approvals for treating rare blood disorders, offering potential peak annual sales in the billions. Additionally, VX-548, a non-CF therapy for pain management without the adverse effects of opioids, is poised for market entry.
Looking ahead, Vertex’s exploration of inaxaplin for APOL1-mediated kidney disease (AMKD), a condition affecting more patients globally than CF, presents a substantial growth opportunity.
Despite its impressive prospects, Vertex remains attractively valued with a price-to-earnings-to-growth (PEG) ratio of only 0.6, indicating potential for significant gains. While meeting analysts’ growth expectations is crucial, Vertex’s robust CF franchise, innovative products like Casgevy, and promising pipeline suggest it’s well-positioned for success.
