We recently published a list of 12 High Growth International Stocks to Invest in Now. In this article, we are going to take a look at where Ascendis Pharma A/S (NASDAQ:ASND) stands against other high growth international stocks to invest in now.
What To Expect From The Stock Market in 2025?
On January 15, Jurrien Timmer, Director of Global Macro at Fidelity Management & Research Company shared his outlook for 2025. He believes that the market has lost some of its momentum as the prospects of more rate cuts in 2025 have gone slimmer. One of the reasons for less likely rate cuts came a few weeks ago with a stronger-than-expected job market report, which sparked a market dip. Moreover, on the same day, long-term interest rates went higher. The 10-year treasury yield climbed closer to the 5% mark which has haunted stocks in the past.
However, Timmer believes the market is still in a bull phase, primarily driven by rising earnings, which he expects will continue to support market growth. This optimism is grounded in the historical performance of bull markets, where earnings often play a crucial role in sustaining upward momentum. He pointed out that as bull markets mature, they typically experience greater volatility. This means that even minor disruptions can lead to significant market fluctuations. High price-to-earnings (P/E) ratios contribute to this sensitivity, as elevated valuations can make the market more susceptible to corrections. Timmer also highlighted his concerns over interest rates, specifically, the Fed’s ability to cut rates, which are likely to persist. This “interest-rate angst” could continue influencing market behavior throughout the year, as investors will continue to grapple with how rate changes can affect stock valuations and overall economic conditions.
Moreover, Timmer also discussed the shifting dynamics in the stock market, particularly focusing on the transition from a narrow leadership group to a broader market participation. He noted that in the latter half of 2024, there was a notable shift in market leadership from the “Magnificent 7”, to a wider array of stocks. This broadening indicates that more sectors and companies are contributing to market gains, which is generally seen as a positive sign for overall market health. However, since mid-December, following the Fed’s reduced expectations for interest rate cuts, the market has lost momentum, as only 24% of stocks were trading above their 50-day moving average, and just 29% of S&P 500 stocks were outperforming the index. This indicates a narrowing participation in market gains, which is concerning for investors who prefer broad-based growth.
While talking about large-cap stock performance, Timmer raises the question of whether this trend of narrow leadership will persist. He suggested that trends continue to move in the same direction until a significant change occurs. Given that large-cap growth stocks have dominated for years, it is reasonable to assume that they may continue to lead. However, he also cautioned the investors that as per the concept of mean reversion, asset prices will eventually return to their historical averages and when this happens, it could lead to sharp corrections in stock prices. Timmer believes that while 2024 was a “Goldilocks year,” for earnings and valuations, this year can be a tussle between higher earnings and rising long-term interest rates, thereby resulting in a volatile market.
Our Methodology
To curate the list of 12 high-growth international stocks to invest in now, we used the Finviz stock screener and Seeking Alpha. We used the screener as a starting point of our research to get (Ex-USA) stocks that have grown their revenue by more than 15% during the last 5 years. Next, we checked these stocks for 10-year revenue growth rates from Seeking Alpha and selected only those stocks that had grown by more than 25% during the last decade. Lastly, we ranked the stocks in ascending order of the number of hedge fund holders sourced from Insider Monkey’s third-quarter database.
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).
Is Ascendis Pharma A/S (ASND) the High Growth International Stock to Invest in Now?
A close-up view of a hand manipulating a syringe while delivering TransCon CNP into a tumor.
Ascendis Pharma A/S (NASDAQ:ASND) is a biopharmaceutical company based in Denmark that focuses on developing and manufacturing medications for various health conditions including growth hormone deficiency, Endocrinology, central nervous system disorders, and infectious diseases. The company operates internationally through several subsidiaries located in countries such as Germany and the United States.
The company differentiates based on its proprietary technology platform called TransCon, which improves the efficiency of the drug by controlling how medications are released in the body over time. On January 13 Gavin Clark-Gartner from Evercore ISI maintained a Buy rating on the stock, maintaining a price target of $220. Ascendis Pharma A/S (NASDAQ:ASND), during the third quarter results for fiscal 2024 reported strong demand for its products, particularly SKYTROFA (TransCon hGH), which saw over a 60% increase in volume year-over-year due to its effectiveness and convenience compared to daily growth hormone therapies.
In addition to SKYTROFA, YORVIPATH was also a strong contender as it generated a revenue of €8.5 million during the quarter. Management on December 19 announced the launch of YORVIPATH in the United States as well, where approximately 70,000 to 90,000 adults would benefit from the treatment. It is one of the 12 high-growth international stocks to invest in now.
PGIM Jennison Health Sciences Fund stated the following regarding Argenx SE (NASDAQ:ARGX) in its Q3 2024 investor letter:
“Argenx SE (NASDAQ:ARGX) develops antibody-based medicines for autoimmune diseases and cancer. Its flagship drug is Vyvgart (efgartigimod), a first-in-class anti-FcRn approved in the U.S., E.U., and other key geographies globally for the treatment of myasthenia gravis (MG). The launch has far exceeded expectations, speaking to the unmet need in this category, and the company (and we) now expect MG to be a far bigger opportunity than initially modeled, generating in excess of $5b in peak sales. The recent approval of a subcutaneous formulation of Vyvgart should sustain and accelerate these strong growth trends. Vyvgart is a true “pipeline in a product,” posting very strong Phase III results in chronic inflammatory demyelinating polyradiculoneuropathy (CIDP), which should add another $4b to peak sales. The company’s antibody discovery platform is also advancing several earlier-stage assets, with the first Phase 2 for their next potential “pipeline in a product,” empasiprubart, reading out in 2024. With both an attractive pipeline and commercial opportunity, Argenx’s near term focus has been on the global Vyvgart launch and the potential to expand on both the drug formulation (subQ) and indication sides (CIDP approval and launch in 2024, and several other autoimmune-mediated indications in trials). The company also has a partnership with Zai Lab to market Vyvgart in China, providing upside to long-term peak sales potential. Argenx also has multiple readouts for additional Vyvgart indications in 2024/2025 and relatively lower pipeline readout binary risk at this stage of the development story, given the first major indication of MG is already on the market and the second major indication of CIDP has begun to ramp in utilization. We believe Vyvgart is on track to grow sales from $2B in 2024 to approximately $8B into the early 2030’s on MG and CIDP alone. This attractive sales growth and a lean organization structure should allow the company to achieve above average growth rates for the next several years. Argenx has also recently unveiled additional molecules that we think have significant long-term potential, especially their second program, empasiprubart, which could be another blockbuster pipeline in a product and is already in mid-stage trials for its lead indication, rare neurological disease multifocal motor neuropathy, or MMN.”
Overall, ASND ranks 5th on our list of high growth international stocks to invest in now. While we acknowledge the potential of ASND to grow, 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 ASND but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
