Three Investment Opportunities in Rapidly Expanding Companies, Purchase With Confidence Immediately
Three Investment Opportunities in Rapidly Expanding Companies, Purchase With Confidence Immediately
Many investors struggle with heights of a different kind – the fear of investing in stocks when the market is soaring high. While they're not worried about climbing ladders, they become apprehensive about putting their money in stocks during market booms.
Three contributors from Fool.com believe they've discovered stocks that could help alleviate investors' anxieties. Here's why they recommend purchasing Eli Lilly (LLY -1.28%), Novo Nordisk (NVO 1.03%), and Vertex Pharmaceuticals (VRTX 0.94%) right away without any second thoughts.
Seize the opportunity to invest in this leading pharmaceutical company
*Faithful Sam* (Eli Lilly): If you're searching for top-notch growth stocks to buy promptly, it's a wise move to consider investing in one of the top-performing healthcare titans in recent times – Eli Lilly. The pharmaceutical giant has suffered a significant downturn recently. Eli Lilly's shares have taken a nosedive following its third-quarter earnings release.
Surprisingly, boosting its $11.4 billion revenue by 20% annually – a remarkable feat for any pharmaceutical giant – isn't enough. On the downside, Eli Lilly narrowly missed its revenue and earnings projections. The company also slightly trimmed its full-year guidance.
However, these occurrences are merely hiccups in the grand scheme of matters. Eli Lilly's arsenal includes two incredibly swift-growing game-changers: Mounjaro and Zepbound, which treat diabetes and obesity, respectively. While these two medications have been grabbing all the headlines, it's worth noting that some of Eli Lilly's older products continue to make significant contributions.
In the third quarter, sales of cancer drug Verzenio shot up by 32% year over year to $1.4 billion. Newer products like Alzheimer's medicine Kisunla will eventually help fuel growth. Moreover, Eli Lilly boasts one of the most alluring weight loss pipelines on the market – a lucrative area that every notable drugmaker is focusing on now.
Could Eli Lilly's valuation pose a challenge? The company's forward price-to-earnings ratio still appears high at approximately 61. The industry average is 18.
However, Eli Lilly's adjusted earnings per share (EPS) in the third quarter was $1.18, compared to $0.10 in the comparable quarter of the previous fiscal year. Analysts predict that the company's EPS will grow at an average of 71.7% per year over the next five years. Eli Lilly's valuation isn't unreasonable in light of its prospects. Even after its recent downturn, the stock remains an excellent growth play in the healthcare industry.
Score a deal with Novo Nordisk
*Benevolent Bill* (Novo Nordisk): One stock that I wouldn't hesitate to buy today is Novo Nordisk. This Danish healthcare juggernaut is a pioneer in the anti-obesity market. As new GLP-1 drugs and weight loss products flood the market in the future, Novo Nordisk will have an advantage as one of the early entrants.
Semaglutide has been on the market since 2017, and it is the active ingredient in the top-selling diabetes drug, Ozempic, as well as its weight-loss drug, Wegovy. With semaglutide having a longer track record and being available for several years, it will likely be a safer option for patients to consider than newer drugs whose long-term side effects are less understood.
Novo Nordisk is an attractive growth stock to buy and hold because the company is only in the early stages of launching Wegovy in international markets and is expanding its capacity to satisfy rising demand. As it does, its numbers are looking splendid. This year, the company projects its sales and profits to increase by more than 20% (up to 27% at constant exchange rates).
Investors can purchase the stock at a remarkably low 27 times projected earnings for the following year (based on analyst estimates). Given the potential growth that may be ahead for Novo Nordisk in the long term, this seems like an excellent bargain buy. Even though Ozempic has been on the market for years, it continues to generate impressive sales growth of 32% through the first nine months of this year. Wegovy, on the other hand, is truly unstoppable, with its growth rate surging at 76%.
Novo Nordisk is one of the best growth stocks you can buy today.
Don't delay your purchase of this remarkable biotech stock
*Wise Walter* (Vertex Pharmaceuticals): I expect 2025 to be an outstanding year for Vertex Pharmaceuticals. And things should only get better after that. Why, you ask? Let me explain.
First and foremost, Vertex is waiting for not one but two regulatory approvals early next year. The U.S. Food and Drug Administration (FDA) has scheduled a 'Prescription Drug User Fee Act' (PDUFA) date of Jan. 2, for an approval decision on the company's vanzacaftor triple-drug combo targeting cystic fibrosis (CF). The agency is scheduled to announce a decision on suzetrigine in treating moderate to severe acute pain by Jan. 30.
I believe both drugs will easily pass the FDA's approval process. Moreover, I think both will become massive commercial successes for Vertex. Second, Vertex's launch of Casgevy is still in its early stages. Sales for the first CRISPR gene-editing therapy on the market are only gradually picking up speed. I anticipate Casgevy to begin generating meaningful revenue for Vertex in 2025.
Thirdly, Vertex intends to disclose data from two crucial experimental trials in the upcoming year. The organization anticipates releasing findings from a stage 1/2 trial assessing the efficacy of messenger RNA treatment VX-522 in managing CF during the first half of 2025. Additionally, it expects to unveil preliminary data from phase B of a stage 1/2 study focusing on VX-264's impact on type 1 diabetes treatment. These revelations might significantly contribute to Vertex's mission to eradicate the disease.
Furthermore, Vertex's portfolio includes two additional advanced-stage initiatives with significant potential. Inaxaplin is designed to tackle APOL1-induced kidney disease, while Povetacicept targets IgA nephropathy and other autoimmune diseases caused by B cells. These drugs might provide Vertex with access to new, potentially more substantial markets than CF.
Meanwhile, Vertex's robust CF therapy, Trikafta/Kaftrio, continues to demonstrate strong sales growth. Moreover, the company maintains a substantial cash reserve of $11.2 billion, which could be utilized for potential acquisitions. Consequently, I believe this biotech stock is a promising investment opportunity that should be considered promptly.
Considering the potential growth of Eli Lilly's game-changing diabetes and obesity medications, investing in this pharmaceutical giant could alleviate fears for many investors. Even with a high forward price-to-earnings ratio, the company's EPS growth prediction of 71.7% per year over the next five years justifies the investment.
Investors might find a bargain in purchasing Novo Nordisk, a healthcare juggernaut with a long-term advantage in the anti-obesity market. With semaglutide's success and the expansion of Wegovy sales, Novo Nordisk's future sales and profits growth of over 20% this year makes it an attractive investment opportunity.