3 unstoppable stocks that you can buy now without any hesitation

By | March 18, 2024

Investors can be procrastinators. It’s easy to get so caught up in analyzing stocks that people put off buying them. But that doesn’t have to be the case.

Three Motley Fool contributors have identified unstoppable stocks that they think you can buy right now without hesitation. This is why they chose Eli Lilly (NYSE: LLY), Novo Nordisk (NYSE: NVO)And Vertex Pharmaceutica (NASDAQ: VRTX).

Eli Lilly: Don’t worry about the little things

Prosper Junior Bakiny (Eli Lilly): No business is completely isolated from obstacles. High-flying Eli Lilly is no exception. While the drugmaker has delivered market-shaking returns in recent years, the company has faced regulatory headwinds. Last week, the U.S. Food and Drug Administration (FDA) announced it would delay approval of Eli Lilly’s donanemab, a therapy for Alzheimer’s disease.

The health care regulator will also convene a panel of experts to discuss the clinical trial Eli Lilly used to support the use of donanemab, a possible sign of ambiguity in the data. The pharmaceutical giant’s shares fell on the news, which I think was a misguided reaction. Even without donanemab approval, Eli Lilly’s stance is exceptional.

The company has what could be the best-selling clinical agent in industry history in tirzepatide, marketed as Zepbound, in the weight loss market. Eli Lilly’s new cancer drug Jaypirca could reach annual sales of $3 billion by 2032, while ulcerative colitis drug Omvoh, also a new addition to its lineup, could cross the $1 billion mark by 2029.

That hardly tells the whole story. Eli Lilly’s lineup and pipeline look promising. The company’s major approvals in recent years were not flukes. While adding donanemab would be a boost, Eli Lilly’s prospects remain excellent even if the FDA gives it a positive review.

The company has been unstoppable over the past decade, with returns that are unusual for drugmakers of this size. One or two regulatory setbacks won’t change the company’s prospects. Don’t worry about the little things. Eli Lilly remains a no-brainer stock to buy right now.

Novo Nordisk: The growth potential just got a huge upgrade

David Jagielski (Novo Nordisk): Novo Nordisk ranks as one of the most valuable healthcare companies in the world, with a market capitalization of nearly $600 billion. Unlike many companies vying to bring weight loss products to market, Novo Nordisk already has a solid reputation not only in weight loss, but also in diabetes.

The business centers revolve around these treatments. And between Ozempic for diabetes and Wegovy for weight loss, it has some exciting assets to build its future around. Last week, investors got even more reasons to remain optimistic about the stocks. The FDA has approved a new indication for Wegovy to reduce cardiovascular risk in obese or overweight adults.

This is a big win for Novo Nordisk because it achieves two things in the process. It gives doctors another reason to prescribe Wegovy and potentially gives health insurers more reason to provide coverage now that Wegovy is more than just a weight-loss treatment.

In 2023, Novo Nordisk generated net sales totaling 232.3 billion Danish kroner ($34.8 billion), while sales rose 36% when excluding the impact of foreign currencies. And operating profit rose 51% to 83.7 billion Danish crowns ($12.6 billion).

While Ozempic’s sales rose 66% last year at constant exchange rates, Wegovy’s growth was even higher, at 420%. These powerful products still have much more room to grow and generate more revenue for Novo Nordisk in the future. And now that Wegovy is getting a new indication, the future for the company is becoming increasingly bright.

It may seem like an expensive stock to own, as it trades at almost 50 times earnings. But with so much growth ahead, Novo Nordisk is still a top growth stock to buy right now.

Vertex Pharmaceuticals: an easy choice for long-term investors

Keith Speights (Vertex Pharmaceuticals): Why are investors sometimes hesitant to buy stocks? Concerns about growth prospects can be a factor, especially if a company faces intense competition. Appreciation can do that too. However, neither of these are problems for Vertex Pharmaceuticals.

Vertex doesn’t have to worry about competition for its cystic fibrosis (CF) therapies in the near term. No other company has an approved product that treats the underlying cause of the rare genetic disease. And its only potential rival is still in phase 2 of clinical testing – years at best before it has a chance to enter the market.

CF remains a growth market for Vertex. The company hopes to apply for approval of the vanzacaftor-triple drug combination this summer. If approved (which seems likely), this latest CF therapy could be Vertex’s most profitable yet.

The company has already gone beyond CF, with Casgevy receiving approval for the treatment of two rare blood diseases: sickle cell disease and transfusion-dependent beta-thalassemia. Casgevy should reach its annual peak sales, measured in billions of dollars.

Another non-CF therapy could soon hit the market. Vertex plans to file registration applications for VX-548 in mid-2024. The pain drug should have enormous commercial potential as it does not have the addictive potential and negative side effects of opioids.

We may not have to wait just a few more years before Vertex opens up a brand new huge market. The company is evaluating inaxaplin in late-stage clinical trials targeting APOL1-mediated kidney disease (AMKD). This disease affects more patients worldwide than CF – and there are no approved therapies to treat its underlying cause.

As for valuation, Vertex’s price-to-earnings-growth (PEG) ratio is just 0.6. Any PEG ratio significantly lower than 1 is a bargain. Granted, Vertex needs to meet analysts’ growth forecasts. But given the company’s rock-solid CF franchise, a hot new product in Casgevy, and a promising pipeline, I don’t think that will be a problem.

Should You Invest $1,000 in Eli Lilly Right Now?

Consider the following before purchasing shares in Eli Lilly:

The Motley Fool stock advisor The analyst team has just identified what they think is the 10 best stocks for investors to buy now… and Eli Lilly wasn’t one of them. The ten stocks that survived the cut could deliver monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including portfolio building guidance, regular analyst updates and two new stock picks per month. The Stock Advisor service has more than tripled the return of the S&P 500 since 2002*.

View the 10 stocks

*Stock Advisor returns March 11, 2024

David Jagielski has no position in any of the stocks mentioned. Keith Speights holds positions at Vertex Pharmaceuticals. Prosper Junior Bakiny holds positions at Vertex Pharmaceuticals. The Motley Fool holds positions in and recommends Vertex Pharmaceuticals. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.

3 Unstoppable Stocks You Can Buy Right Now Without Hesitation was originally published by The Motley Fool

Leave a Reply

Your email address will not be published. Required fields are marked *