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 Novo Nordisk A/S (NYSE:NVO) 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 elderly couple receiving insulin from a pharmacist, representing healthcare company’s successful pharmaceutical products.
Novo Nordisk A/S (NYSE:NVO)
5-Year Revenue CAGR: 17.17%
Number of Hedge Fund Holders: 67
Novo Nordisk A/S (NYSE:NVO) is a global healthcare company based in Denmark, primarily focused on developing and manufacturing medicines for chronic diseases. The company is a leader in diabetes care, obesity care, hemophilia care, therapies for rare endocrine disorders, and other treatments that help millions of people around the world. With a strong commitment to research and innovation, Novo Nordisk has research and development centers in five countries and operates production facilities in nine countries. The company offers its products in 170 countries worldwide, allowing it to reach a diverse range of patients and healthcare providers.
The company is focused on expanding its market presence and enhancing its product offerings, particularly in diabetes and obesity care. In the first half of 2024, Novo Nordisk A/S (NYSE:NVO) experienced impressive sales growth of 25% year-over-year at constant exchange rates, driven largely by increased demand for its GLP-1-based diabetes and obesity treatments. With North American operations growing by 36% and international operations growing by 11%, the company is successfully reaching more patients through innovative therapies like Wegovy and Ozempic. Novo Nordisk is also making strides in research and development, with promising results from clinical trials for treatments aimed at conditions such as hemophilia A and cardiovascular risk.
Additionally, Novo Nordisk A/S (NYSE:NVO) is strategically rolling out its weight-loss medication, Wegovy, in international markets while managing supply and demand effectively. The company has also gained significant market share in the diabetes sector, now holding a 34.1% global value market share, surpassing its goal of reaching one-third market share by 2025. With a robust pipeline of products and ongoing clinical trials, the company demonstrates a strong commitment to innovation.
These factors position Novo Nordisk A/S (NYSE:NVO) well for continued growth, making it an attractive stock option for investors looking for long-term potential in the healthcare sector. Analysts are also bullish on NVO. Analysts currently hold a consensus buy rating on the stock and the 1-year median price target of $155.12 set by analysts indicates a potential upside of 31% from current levels.
Over the past five years, Novo Nordisk A/S (NYSE:NVO) has achieved an average annual growth rate of 17.17% in revenue and 19.06% in net income.
According to Insider Monkey’s Q2 2024 database of over 900 hedge funds, 67 hedge funds held stakes in Novo Nordisk A/S (NYSE:NVO). Artisan Partners stated the following regarding Novo Nordisk A/S (NYSE:NVO) in its “Artisan Global Equity Fund” Q1 2024 investor letter:
“In addition, shares of Novo Nordisk A/S (NYSE:NVO) rose after it reported phase 1 clinical trial results for its new experimental obesity drug Amycretin, a single molecule that operates as a GLP-1 receptor agonist, reducing one’s appetite. The new oral treatment achieved a 13.1% average weight loss after 12 weeks, more than doubling the efficacy of Wegovy for the same time span. This result also bested Lilly’s Orfoglipron, another experimental drug that achieved 5%–6% average weight loss earlier in its trials. While the Amycretin data are preliminary, investors were encouraged by the prospects of Novo Nordisk solidifying a best-in-class obesity designation, a desirable status given rising competition. In our view, Novo Nordisk has the best obesity/Type 2 diabetes pipeline in the industry, which should help protect this franchise from competition over the next 10 years.”
Overall, NVO ranks 6th on our list of stocks with consistent growth to buy. While we acknowledge the potential of NVO, 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 NVO 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.