Investors can be procrastinators. It's easy to get caught up in analyzing stocks so much that people put off buying them. But that doesn't have to be the case.
Three Motley Fool contributors have identified unstoppable stocks they think you can buy now without any hesitation. Here's why they chose Eli Lilly (NYSE: LLY), Novo Nordisk (NYSE: NVO), and Vertex Pharmaceuticals (NASDAQ: VRTX).
Prosper Junior Bakiny (Eli Lilly): No company is completely insulated from obstacles. High-flying Eli Lilly is no exception. Though the drugmaker has delivered market-shattering returns in recent years, it has encountered some regulatory headwinds. Last week, the U.S. Food and Drug Administration (FDA) announced it would delayapproval of Eli Lilly's donanemab, a therapy for Alzheimer's disease.
The health regulatory agency will also convene a panel of experts to discuss the clinical trial Eli Lilly used to support donanemab's application, a potential sign of ambiguity in the data. The pharmaceutical giant's shares fell on the news, which I think was a misguided reaction. Even without approval of donanemab, Eli Lilly's lineup is exceptional.
The company boasts what could become the best-selling clinical compound in the history of the industry in tirzepatide, marketed as Zepbound, in the weight-loss market. Eli Lilly's new cancer medicine Jaypirca could hit annual sales of $3 billion by 2032, while ulcerative colitis medicine Omvoh -- also a new addition to the lineup -- could cross the billion-dollar mark in annual sales by 2029.
That hardly tells the whole story. Eli Lilly's lineup and pipeline look highly promising. The company's important approvals in recent years haven't been flukes. While adding donanemab would be a boost, Eli Lilly's prospects remain excellent even if the FDA gives it the thumbs down.
The company has been unstoppable in the past decade, with returns that aren't common among drugmakers its size. One or two regulatory setbacks don't change the company's prospects. Don't sweat the small stuff. Eli Lilly remains a no-brainer stock to buy right now.
David Jagielski (Novo Nordisk): Novo Nordisk ranks as one of the most valuable healthcare companies in the world with its market cap close to $600 billion. Unlike many companies vying to get weight-loss products to market, Novo Nordisk already has a solid reputation in not just weight loss but diabetes as well.
Its business centers around those 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 of a reason to remain bullish on the stock. The FDA granted approval for a new indication for Wegovy to reduce the risk of cardiovascular risk in adults who are obese or overweight.
This is a big win for Novo Nordisk as it accomplishes two things in the process. It gives doctors another reason to prescribe Wegovy and potentially gives health insurers more of a 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) as its top line rose by 36% when factoring out the impact of foreign currency. And its bottom line rose by 51% to 83.7 billion Danish kroner ($12.6 billion).
While Ozempic's sales rose at a rate of 66% last year at constant exchange rates, Wegovy's growth rate was even higher at 420%. These high-powered products still have a lot more room to grow and deliver more revenue for Novo Nordisk in the future. And with Wegovy obtaining a new indication, the future just keeps getting brighter for the company.
It may seem like an expensive stock to own since it's trading at nearly 50 times earnings. But with so much growth on the horizon, Novo Nordisk is still a top growth stock to buy right now.
Keith Speights (Vertex Pharmaceuticals): Why do investors sometimes hesitate to buy stocks? Concerns about growth prospects can be a factor, especially if a company faces stiff competition. So can valuation. Neither of these are issues for Vertex Pharmaceuticals, though.
Vertex doesn't have to worry about competition anytime soon for its cystic fibrosis (CF) therapies. No other company has an approved product that treats the underlying cause of the rare genetic disease. And the only potential rival is still in phase 2 clinical testing -- at best, years away from having a chance of entering the market.
CF remains a growth market for Vertex. The company hopes to file for regulatory approval of its vanzacaftor triple-drug combo this summer. If approved (which seems likely), this newest CF therapy could be Vertex's most profitable yet.
The company has already expanded beyond CF with Casgevy winning approvals in treating two rare blood disorders, sickle cell disease and transfusion-dependent beta-thalassemia. Casgevy should reach peak annual sales measured in the billions of dollars.
Another non-CF therapy could soon be on the market. Vertex plans to submit regulatory filings for VX-548 by mid-2024. The pain drug should have tremendous commercial potential because it doesn't have the addictive potential and negative side effects of opioids.
We might not have to wait just a few years more for Vertex to crack open a brand-new massive market. The company is evaluating inaxaplin in late-stage clinical testing targeting APOL1-mediated kidney disease (AMKD). This illness affects more patients globally than CF -- and there are no approved therapies for treating its underlying cause.
As for valuation concerns, Vertex's price-to-earnings-to-growth (PEG) ratio is only 0.6. Any PEG ratio significantly below 1 is a bargain. Granted, Vertex must hit analysts' growth projections. But considering 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?
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David Jagielski has no position in any of the stocks mentioned. Keith Speights has positions in Vertex Pharmaceuticals. Prosper Junior Bakiny has positions in Vertex Pharmaceuticals. The Motley Fool has 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 Now Without Any Hesitation was originally published by The Motley Fool
