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Novo Nordisk A/S Message Board

  • investora2z investora2z Jul 18, 2013 7:02 AM Flag

    Has been good over the long term

    The stock has been a bit volatile in the last one year, but has managed to appreciate by 11% during the period. This is despite a sharp correction from the 52 week high of ~$194 which had taken it to $150. It has recovered a bit, but has started to look a bit sluggish. Over the longer term, the performance has been excellent. The stock has moved with the fundamentals, and delivered great returns for the investors. The net income has doubled since 2009, and the revenue growth has also been excellent during the period. Even the recent quarters have shown good growth on a yoy basis. Margins expanded on a yoy basis in Q1'13. The guidance for growth in revenues is around 9-11%, and operating profit is expected to grow at around 10%. The new insulin product Tresiba has been recently launched in the UK, Denmark and Japan. It may also be launched in US provided the company is able to address the concerns of the FDA. Future looks good with a good pipeline of drugs both in the diabetes and the biopharmaceutical segments. Several of them are at the filing stage. The diabetes segment contributes 80% to its revenues, and is growing faster than the biopharma segment. The valuations appear a little stretched, with a forward P/E of above 20, and the price seems to have factored a lot of positives. But the strong balance sheet, with near zero debt, strong net margins and good cash flow, is difficult to beat. Diabetes management is a crowded segment with small and big players attempting to increase market share. New research by pharmaceutical giants and smaller companies like Chromadex Corporation (CDXC) are continuously being done. Novo Nordisk has an extremely commanding position with 50% market share of insulin in the world. However, further appreciation in the stock will depend on faster growth and improvement in bottom line.

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    • I agree though it may be time to move on. Had this since 1976. I got 1 share and 1 also of Norsk Hydro. Norsk has done terribly. Also got 10 shares of Statoil I want to sell. Odd lots suck. Huge appreciation in Novo. Thinking of buying some Telenor.

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