5 Best Pharmaceutical Stocks to Invest In
In this article, we discuss the 5 Best Pharmaceutical Stocks to Invest In. If you want to read our detailed analysis of these stocks, go directly to the 15 Best Pharmaceutical Stocks to Invest In.
5. Catalent, Inc. (NYSE: CTLT)
Number of Hedge Fund Holders: 40
Catalent, Inc. (NYSE:CTLT) is an American pharmaceutical company, active in R&D and manufacturing of biologics and gene therapies. It also helps other big pharmaceutical companies with drug research and development. It is ranked fifth on our list of 15 best pharmaceutical stocks to invest in. The stock has returned over 32.55% to investors over the course of the past year.
On May 4, Catalent, Inc. (NYSE:CTLT) posted earnings for the first quarter of 2021, reporting earnings per share of $0.82, beating estimates by $0.07. The revenue over the period was around $1.05 billion, up 38.48% year-over-year.
At the end of the second quarter of 2021, 40 hedge funds in the database of Insider Monkey held stakes worth $870.98 million in Catalent, Inc. (NYSE:CTLT).
Out of the hedge funds tracked by Insider Monkey, billionaire Ken Griffin's Citadel Investment Group has the most valuable stake in Catalent, Inc. (NYSE:CTLT) as of the end of the second quarter of 2021, worth $159.7 million, comprising 0.03% of its total 13F portfolio.
Madison Small Cap Fund, in its Q4 2020 investor letter, mentioned Catalent, Inc. (NYSE: CTLT). Here is what the fund said:
"Healthcare continued its streak of underperformance in the fourth quarter. The biotech industry component of the Russell 2000 was up 34% for the quarter and 53% for the year. While we have become more open to investing in this space where appropriate, we prefer molecular diagnostics given less regulatory risk and better revenue diversification. With the new administration comes a shift in healthcare philosophy. We believe that further access to care and coverage expansion will benefit some parts of the sector. However, the risk of further reimbursement cuts, particularly in pharmaceuticals, will bear monitoring. We would note that one of our strong outperformers, Catalent, benefited from increased demand due to the Covid-19 pandemic. This stock returned 84% in 2020. While we think the fundamentals here are still strong, the stock has grown into a midcap.”
4. Zoetis Inc. (NYSE: ZTS)
Number of Hedge Fund Holders: 58
Zoetis Inc. (NYSE:ZTS) is an American pharmaceutical company manufacturing vaccines and medicines for pets and livestock. It is ranked fourth on our list of 15 best pharmaceutical stocks to invest in. The stock has returned over 31.24% to investors over the course of the past year.
On August 5, Zoetis Inc. (NYSE:ZTS) posted earnings for the second quarter of 2021, reporting earnings per share of $1.19, beating estimates by $0.10. The revenue over the period was around $1.95 billion, up 25.84% year-over-year.
At the end of the second quarter of 2021, 58 hedge funds in the database of Insider Monkey held stakes worth $2.7 billion in Zoetis Inc. (NYSE:ZTS).
Out of the hedge funds being tracked by Insider Monkey, Ako Capital is the top stakeholder in Zoetis Inc. (NYSE:ZTS), having 2.4 million shares worth $453.3 million during the second quarter of 2021. Ako Capital has increased its stake in Zoetis Inc. (NYSE:ZTS) by 53% to $453 million.
On August 9, Credit Suisse reiterated its Outperform rating on Zoetis Inc. (NYSE:ZTS) and raised its price target to $230 from $206, noting that the company's investments should expand its market and support innovation in the future.
3. Pfizer Inc. (NYSE: PFE)
Number of Hedge Fund Holders: 67
Pfizer Inc. (NYSE:PFE) is an American pharmaceutical company developing and manufacturing drugs in several medical fields such as oncology and endocrinology. Along with the German biotech company BioNTech SE (NASDAQ:BNTX), it developed one of the earliest Covid-19 vaccines. It is ranked third on our list of 15 best pharmaceutical stocks to invest in. The stock has returned over 31.47% to investors over the course of the past year.
On July 28, Pfizer Inc. (NYSE:PFE) posted earnings for the first quarter of 2021, reporting earnings per share of $1.07, beating estimates by $0.09. The revenue over the period was around $18.98 billion, up 60.81% year-over-year.
At the end of the second quarter of 2021, 67 hedge funds in the database of Insider Monkey held stakes worth $2.4 billion in Pfizer Inc. (NYSE:PFE), up from 65 funds in the preceding quarter.
Out of the hedge funds being tracked by Insider Monkey, Diamond Hill Capital has the most valuable stake in Pfizer Inc. (NYSE:PFE) as of the end of the second quarter of 2021, worth $457.4 million, comprising 1.73% of its total 13F portfolio. Diamond Hill Capital increased its stake in Pfizer Inc. (NYSE:PFE) by 4% to around $457 million. This follows an increase of 23% during the first quarter of 2021.
2. Johnson & Johnson (NYSE: JNJ)
Number of Hedge Fund Holders: 88
Johnson & Johnson (NYSE:JNJ) is an American corporation, active in the pharmaceutical field as well as the field of consumer health (including oral care and OTC medications). It has an AAA credit rating from S&P, making it one of the two companies to have the highest S&P credit rating. It is ranked second on our list of 15 best pharmaceutical stocks to invest in. The stock has returned over 20.46% to investors over the course of the past year.
On July 21, Johnson & Johnson (NYSE:JNJ) posted earnings for the second quarter of 2021, reporting earnings per share of $2.48, beating estimates by $0.20. The revenue over the period was around $23.31 billion, up 27.14% year-over-year.
At the end of the second quarter of 2021, 88 hedge funds in the database of Insider Monkey held stakes in the company worth $7.06 billion in Johnson & Johnson (NYSE:JNJ).
Out of the hedge funds being tracked by Insider Monkey, Fundsmith LLP has the most valuable stake in Johnson & Johnson (NYSE:JNJ) as of the end of the second quarter of 2021, worth $1.2 billion, comprising 3.26% of its total 13F portfolio.
In the Q2 2021 investor letter of Distillate Capital, the fund mentioned Johnson & Johnson (NYSE: JNJ). Here is what the fund said:
"The largest additions in the rebalance, Johnson & Johnson was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”
1. Eli Lilly and Company (NYSE: LLY)
Number of Hedge Fund Holders: 64
Eli Lilly and Company (NYSE:LLY) is an American pharmaceutical company. It is known for introducing insulin to the market. Also, it has many medications to treat an array of different psychiatric conditions. It is ranked first on our list of 15 best pharmaceutical stocks to invest in. The stock has returned over 79.97% to investors over the course of the past year.
On August 3, Eli Lilly and Company (NYSE:LLY) posted earnings for the second quarter of 2021, reporting earnings per share of $0.22, missing estimates by $0.02. The revenue over the period was around $6.74 billion, up 22.56% year-over-year.
At the end of the second quarter of 2021, 64 hedge funds in the database of Insider Monkey held stakes in the company, worth $2.9 billion, up from 55 funds in the preceding quarter.
On August 9, Argus reiterated a Buy rating on Eli Lilly and Company (NYSE:LLY) while raising its price target to $300 from $225, noting a possible revenue stream from its Alzheimer's medication donanemab for which Eli Lilly and Company (NYSE:LLY) will be seeking FDA approval.
In the Q2 2021 investor letter of Baron Funds, the fund mentioned Eli Lilly and Company (NYSE: LLY). Here is what the fund said:
"We started a position in Eli Lilly and Company, a large-cap pharmaceutical company. We think Lilly has a healthy base business with limited near-term patent expirations, a strong pipeline, and potential for significant margin expansion, which should translate to high single-digit revenue growth and mid-teens earnings growth over the next five years. Lilly’s pipeline includes donanemab, a potential blockbuster drug which the company is developing for Alzheimer’s disease and which recently received Breakthrough Therapy Designation by the FDA.”
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