12 Best Diabetes Stocks To Buy Now
In this article, we shall discuss the 12 best diabetes stocks to buy now. To skip our detailed analysis of the global diabetes drugs industry in 2023, go directly and see 5 Best Diabetes Stocks to Buy Now.
Diabetes is a chronic metabolic disease which is normally characterized by high blood glucose levels, which tend to severely damage the heart, blood vessels, eyes, kidneys, and the nervous system. According to a report by Precedence Research, the global diabetes drug market size was valued at $61.9 billion in 2022 and is expected to hit $118 billion by 2032, growing at a CAGR of 6.67% during the forecast period 2022-2032. The market was predominantly controlled by the insulin segment of the diabetes industry, with the insulin segment to grow at a CAGR of more than 3% during the forecast period, owing to skyrocketing demand from people who suffer from Type-1 diabetes.
This rampant growth is catalyzed by certain drivers, one of them being an excessive sugar diet. Advancements in diabetes diagnosis devices like portable glucometers drive the diabetes market to post impressive growth figures. Furthermore, an increase in R&D for innovating diabetes treatments and market product approvals is a significant contributor to the market share growth for some of the best diabetes stocks to buy now like Abbott Laboratories (NYSE:ABT), Pfizer Inc. (NYSE:PFE), and Eli Lilly and Company (NYSE:LLY). Furthermore, technological innovation in diabetic treatment provides enormous opportunities for the diabetes sector. Innovation in technology, such as the introduction of high-end insulin pumps and pens, cause demand to surge and encourages leading manufacturers to direct greater investments in developing advanced products to secure significant market shares. According to a report by Bloomberg, more than 1.3 billion people globally are projected to by inflicted with diabetes by 2050, which in turn, is likely to cause demand for diabetes drugs to surge. The vast majority of this population is expected to have type-2 diabetes, which is the variant of the disease intricately interlinked with obesity. A report by McKinsey also highlights that the rampant growth in the fast food industry and innovations and evolutions in food delivery are a primary cause of obesity in many countries and are directly linked to a rise in diabetes. With food delivery becoming a global market valued at more than $150 million as of 2022, the outlook for global diabetes seems to be incredibly bleak. However, it provides huge upside potential for some of the best diabetes stocks to buy now. You can read more on the diabetes industry in our article 10 Best Ways to Prevent Type-2 Diabetes.
Digital Therapeutics in the Diabetes Industry: An Overview
As the burden of chronic diseases, like diabetes and obesity, exacerbate around the world and insert additional pressure on already dwindling economic and public health systems, these challenges have created a need for extensive and effective disease management solutions which are optimized and enabled via digital technologies. According to McKinsey, global health funding grew at an impressive rate of a little less than 80% over 2022 to reach more than $57.2 billion in 2023. Within this segment, funding for digital therapeutics has surged at a greater rate - up by more than 130% as compared to 2022 to reach a mammoth $8.9 billion in 2021. Hence, it becomes increasingly clearer that digital therapeutics can play an infinitely critical role in the management and even responsiveness to chronic diseases like diabetes. The article asserts that chronic diseases need to be dealt with not only by mere medication by also with regular monitoring and lifestyle changes, causing some of the best diabetes stocks to buy now like Abbott Laboratories (NYSE:ABT), Pfizer Inc. (NYSE:PFE), and Eli Lilly and Company (NYSE:LLY) to divert greater investments towards the production and development of digital therapeutic devices. These companies have understood that digital technologies can play a critical role in drastically facilitating disease management, primarily owing to the fact that more than 67% of the global population now has an unrestricted access to the internet, as per a report by Freedom House.
McKinsey sheds light upon four primary elements of impactful digital therapeutics solutions, one of them being regular monitoring, measurement and feedback through a connected medical device ecosystem. Technologies such as smart inhalers and continuous glucose monitors can alert patients and provide them with out-of-range readings. Secondly, the best diabetes stocks to buy now like Abbott Laboratories (NYSE:ABT), Pfizer Inc. (NYSE:PFE), and Eli Lilly and Company (NYSE:LLY) which have diverted significant focus on the development of their digital therapeutics portfolio must keep payers and providers within the information ecosystem, by opening the doors for payers to identify and reward good behavior on the part of the patient, and penalize poor adherence to health plans which are prescribed by providers. Furthermore, companies can also invest in the integration of gamified behavioral modification techniques by offering challenges and incentives to track compliance with health plans. Lastly a recent survey conducted by McKinsey discovered that more than 90 percent of healthcare leaders are of the view that patients prefer an integrated journey rather than point experiences. Companies can fulfill this desire by investing in digital health malls which include easy access to prescribed medications, health supplements, wellness products, and diagnostic kits.
Our Methodology
To compile our list of the 12 best diabetes stocks to buy now, we first made a list of the 30 largest diabetes companies in the world in terms of their market capitalization. Some companies are pure-play diabetes companies while others generate a significant portion of their annual revenue through diabetes drugs and devices. Then, we picked 12 stocks with strong fundamentals, positive analyst ratings, or a favorable hedge fund sentiment. The stocks have been ranked based on the number of hedge funds which hold stakes in them as of Q3 2023, from lowest to highest.
To read more on some of the emerging markets for diabetes companies, check out our article on the 30 Countries With The Highest Diabetes Per Capita.
Best Diabetes Stocks To Buy Now
12. Tandem Diabetes Care Inc. (NASDAQ:TNDM)
Hedge Fund Holdings: 17
Based in San Diego, California, Tandem Diabetes Care Inc. (NASDAQ:TNDM) is an American medical device manufacturer which focuses on the production and development of advanced medical technologies for the management of diabetes and specifically insulin infusion therapy. The company's balance sheet is in good shape overall and management is fairly optimistic with respect to new product launches which are expected to drive sales growth and reduce losses. The company is executing on numerous near-term product launches whilst implementing scalable systems and processes to uphold global operations and leverage the company's infrastructure. In Q3 2023, Tandem Diabetes Care Inc. (NASDAQ:TNDM) generated a total revenue of $185.6 million. The following is an excerpt from CEO John Sheridan's statement from Tandem Diabetes Care's (NASDAQ:TNDM) Q3 2023 earnings call transcript:
"Reflecting on our third quarter results, our overall performance was above our baseline expectations, primarily due to the U.S. market. Over the past few weeks, I have had an opportunity to attend some of our regional sales meetings across the United States and was excited and encouraged by my conversations. My first takeaway is that the t:slim X2 and with Control-IQ continues to be the best AID system available. This is also reflected in third-party research and our own customer satisfaction surveys. It's evident in our low attrition and higher percentage of customers choosing to purchase a new t:slim X2 from Tandem after their warranty expires. My next takeaway is that overall competitive dynamics remain stable. Some products are newer than others, but the noise from the other AID offerings is in line with our expectations, and the diabetes community is learning more about what these products are and what they are not."
11. Novartis AG (NYSE:NVS)
Hedge Fund Holdings: 26
Based in Basel, Switzerland, Novartis AG (NYSE:NVS) is a Swiss multinational pharmaceutical corporation and is one of the largest pharmaceutical companies in the world by revenue. The company was able to maintain hedge fund sentiment around its stock with 26 funds long the stock in both, Q2 and Q3 of 2023. In Q3 2023, Novartis AG (NYSE:NVS) generated an annual revenue of $12.1 billion. The company beat EPS estimates of $1.7 by $0.13, generating earnings of $1.83 per share in Q3 2023.
The stock is expected to experience a margin uplift in the near-term and post the Sandoz spinoff, Novartis AG (NYSE:NVS) has been able to drastically build upon its growth and overall profile. The biopharma business is doing remarkably well overall and owing to a substantial acquisition of high-growth products and pipeline potential, the company is incredibly well-positioned to generate impressive shareholder value in the coming years. Novartis AG (NYSE:NVS) has posted incredible growth in 2023, with an AA- credit rating from S&P. Furthermore, the stock as a 3.5% dividend yield and a mid to upper-single-digit annual earnings growth, making it one of the best diabetes stocks to buy now for investors interested in dividends.
10. Sanofi SA (NYSE:SNY)
Hedge Fund Holdings: 29
Headquartered in Paris, France, Sanofi SA (NYSE:SNY) is a French multinational pharmaceutical and healthcare company which focuses on the research and development, manufacturing, and marketing of pharmacological products, primarily catering to the prescription market. In Q3 2023, Sanofi SA (NYSE:SNY) posted an EPS of $2.77, beating estimates of $2.27 by $0.5.
On November 15, Berenberg Bank raised the price target on Sanofi SA (NYSE:SNY) from $55 to $56, and maintained a Buy rating on the shares. With reports of the company preparing for a separation of its consumer health business doing the rounds, ADRs for Sanofi SA (NYSE:SNY) ticked up briefly. The company expects 2023 business EPS to grow mid single-digit at CER, not considering any unforeseen major events. The continued impressive performance of the company's Dupixent drug and the excitement surrounding the product launch of Beyfortus are expected to continue driving growth for the stock in 2024 and point towards a highly strategic execution towards sustainable growth on the backs of innovative medications.
9. Insulet Corporation (NASDAQ:PODD)
Hedge Fund Holdings: 44
Based in Massachusetts, Insulet Corp. (NASDAQ:PODD) is an American diabetes device manufacturer which focuses on the production and development of insulin delivery systems. Hedge fund sentiment around Insulet Corp. (NASDAQ:PODD) increased in Q3 2023, with 44 hedge funds having stakes in the stock, up from 39 a quarter ago. The company generated earnings of $0.71 per share, beating estimates of $0.4 by $0.31.
On November 18, BofA slashed the price target on Insulet Corp. (NASDAQ:PODD) to $180 from $295, and maintained a Buy rating on the shares. The company's third quarter results far exceeded expectations with global Omnipod growth of more than 27%. Total company grew more than 25% and as the result, the company raised guidance for all of 2023. The company is seeing robust operating momentum and although there was an initial dip in stock price after the rapid growth of weight loss therapies by other companies which are expected to disrupt the diabetes market as a whole, the stock jumped by more than 10% after the company reported strong sales of its Omnipod insulin pumps and raised guidance significantly, putting up a strong resistance to investor scrutiny that GLP-1 weight loss drugs might chip away at the sales of diabetes management devices.
8. AstraZeneca plc (NYSE:AZN)
Hedge Fund Holdings: 49
Based in Cambridge, England, AstraZeneca plc (NYSE:AZN) is an Anglo-Swedish multinational pharmaceutical and biotechnology enterprise which focuses on developing a portfolio of products geared towards treating oncology, infection and diabetes. On November 22, Berenberg Bank raised the price target on AstraZeneca plc (NYSE:AZN) to $78 from $76, and maintained a Buy rating on the shares. The analyst maintained that AstraZeneca plc (NYSE:AZN) is one of the best diabetes stocks to buy now in terms of five-year share price growth. The company's product portfolio is much more diversified than its competitors, with oncology division revenues 17% higher year-on-year in 1H23.
Hedge fund sentiment around AstraZeneca plc (NYSE:AZN) has skyrocketed in Q3 2023, with 49 funds long the stock, up from 41 funds in the preceding quarter. In the third quarter of 2023, the company posted earnings of $0.87 per share, beating estimates of $0.84 by $0.03. Furthermore, AstraZeneca plc (NYSE:AZN) generated a quarterly revenue of $11.4 billion in Q3 2023.
7. Novo Nordisk AS (NYSE:NVO)
Hedge Fund Holdings: 51
Based in Bagsværd, Denmark, Novo Nordisk AS (NYSE:NVO) is a Danish multinational pharmaceutical company which manufactures and markets pharmaceutical products and services, primarily focusing on diabetes care medications and devices. In Q3 2023, the company met EPS expectations, generating earnings of $0.73 per share. Investor interest around Novo Nordisk AS (NYSE:NVO) surged in Q3 2023, with 51 hedge funds long the stock. This was significantly up from Q2 2023, where 43 funds held stakes in Novo Nordisk AS (NYSE:NVO).
On November 13, Deutsche Bank analyst Emmanuel Papadakis conferred a Buy rating upon the stock, and maintained the price target at $113.7. The company has surpassed Nestle as the largest developed-market stock outside of the United States, shedding light upon the resounding success of the GLP-1 drug segment. Furthermore, Novo Nordisk AS (NYSE:NVO) posted robust Q3 2023 results with a 29% year-over-year increase in revenue and as a result, boosted its full-year outlook substantially. Papadakis further expects significant earnings growth for Novo Nordisk in 2023, and maintains that the low stock price currently presents an excellent entry-point for investors.
6. Medtronic plc (NYSE:MDT)
Hedge Fund Holdings: 59
Headquartered in Minneapolis, Minnesota, Medtronic plc (NYSE:MDT) is an American medical device company which focuses on the development and manufacture of healthcare technologies and therapies. On November 22, Morgan Stanley lowered the price target on Medtronic plc (NYSE:MDT) to $98 from $104, and maintained an Overweight rating on the shares. The company posted incredibly impressive Q3 2023 results, generating earnings of $1.25 per share, beating estimates of $1.18 by $0.07. Furthermore, the company generated a revenue of $8 billion, an increase of 5.4% year-over-year. Consequently, Medtronic plc (NYSE:MDT) elevated its FY24 organic revenue growth guidance to 4.75%, up from 4.5%. The companies revenues are adequately dispersed across various different segments, and owing to further product launches and the adoption of integrated solutions in the pipeline, the company expects further growth in 2024. Furthermore, Medtronic plc (NYSE:MDT) has a dividend yield of 4%, making it one of the best diabetes stocks to buy now for investors interested in generating a steady income from the stock.
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Disclosure: None. 12 Best Diabetes Stocks to Buy Now is originally published on Insider Monkey.
