Novo-Nordisk (NVO)

(A Top Pick Oct 04/17, Down 7%) Has owned this for 22 years. #1 insulin maker in the world. Just came out with a drug for weight loss. There'll be a 54% increase in diabetes in 12 years. They and Merck had the best revenue growth. Stock fell a little because a competitor got FDA approval for a similar insulin. They are selling more outside the U.S. and need to sell more to China and India. Then, the street will favour them again.

It's always been pricey, though it has come off due to competition. He'd look to buy it now. Market growth is substanial and NVO can benefit from it.

With diabetes rising worldwide, will this be a successful investment? He does not want to be in the insulin business. The US is about $100 per vial, whereas in Europe it is about half the price. He thinks there is a risk of a Presidential Order that could allow the import of cheaper offshore supply into America.

Technically it has had very touch go. It does not check his boxes. He is concerned about the pharma’s right now.

(A Top Pick August 26, 2016. Up 4.09%). This is a leader in the diabetes space, and that market is growing. The trend is up considerably, especially in emerging market companies. NVO pays a modest dividend, they have a very large market share and a profit margin that is much higher than their competitors because of their scale and size. They can afford to cut prices more aggressively than competitors when they enter new markets. The consumers in emerging markets are price-sensitive so this is an important advantage.

(A Top Pick Jan 27/17. Up 61.37%.) Diabetes unfortunately is a structural growth story. The company has continued to work out well. They raised their dividend. Have about a $4 billion annual share buyback. It generally has more cash than debt. It may be a little ahead of itself, so perhaps wait to Buy in the summer.

Starting moving away from US markets, where all the margin compression on price is coming from. Demand for insulin is going to come out of India and China for the next 25 years. They should be able to continue to grow the business. Margins are so high that they can always generate free cash flow, regardless of where the price of insulin is. If they can get the top line growing, margins are so high they can start to generate free cash flow that will drive the growing dividends over time. For new clients coming in, he is buying a half position only. He wouldn't be an aggressive buyer today.

Has a great lineup of new products coming. They own the insulin market globally, and is the #1 provider in the world, and the leader in technology on insulin. Given the trends of diabetes in the world, that is going to be a growing business. A slower growth health care stock that you can hold and get your 3%-5% dividend yield along with another 5%-10% earnings growth. You’ll do just fine.