In this article, we discuss 11 best diabetes stocks to buy now. If you want to see more stocks in this selection, check out 5 Best Diabetes Stocks To Buy Now.
The global diabetes market is segmented based on the type, drug class, and devices used to treat the condition. Based on the type, the market is divided into type 1 diabetes, type 2 diabetes, and gestational diabetes. Technology advancements in the healthcare space are driving manufacturers to invest in the research and development of efficient insulin delivery devices. The global diabetes care devices market is forecasted to grow from $28,942.1 million in 2022 to $ 42,119.3 million by 2028 at a CAGR of 6.4% during the forecast period.
According to the World Health Organization, diabetes continues to be a huge constraint to global health and is one of the biggest causes of death worldwide, as more than 420 million people are currently diabetic. In 2022, the global insulin market was worth $21.11 billion, and it is predicted to reach $25 billion by 2030. North America is the biggest player in the global insulin market, with a 38.91% market revenue share in 2022.
Some of the best diabetes stocks to invest in include Merck & Co., Inc. (NYSE:MRK), Eli Lilly and Company (NYSE:LLY), and Abbott Laboratories (NYSE:ABT).
Our Methodology
We selected the following diabetes stocks based on positive analyst coverage, strong drug pipelines, and future growth prospects. We have assessed the hedge fund sentiment from Insider Monkey’s database of 920 elite hedge funds tracked as of the end of the third quarter of 2022.
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Number of Hedge Fund Holders: 13
Provention Bio, Inc. (NASDAQ:PRVB) is a New Jersey-based clinical stage biopharmaceutical company, focused on the development and commercialization of therapeutics to diagnose and prevent immune-mediated diseases. It is one of the best diabetes stocks to invest in.
On November 19, Chardan analyst Geulah Livshits raised the price target on Provention Bio, Inc. (NASDAQ:PRVB) to $30 from $24 and maintained a Buy rating on the shares after teplizumab gained FDA approval as the initial treatment to delay the onset of Stage 3 type 1 diabetes in adult and pediatric patients aged eight years and older with stage 2 diabetes. There is “nothing too surprising about the label,” the analyst told investors. She updated her model to reflect the approval, pricing, and a more conservative penetration based on the higher than anticipated price.
According to Insider Monkey’s data, 13 hedge funds were long Provention Bio, Inc. (NASDAQ:PRVB) at the end of the third quarter of 2022, compared to 12 funds in the prior quarter. John Petry’s Sessa Capital is the largest stakeholder of the company, with 14.8 million shares worth $67 million.
Like Merck & Co., Inc. (NYSE:MRK), Eli Lilly and Company (NYSE:LLY), and Abbott Laboratories (NYSE:ABT), Provention Bio, Inc. (NASDAQ:PRVB) is one of the top players in the diabetes market.
Number of Hedge Fund Holders: 21
Halozyme Therapeutics, Inc. (NASDAQ:HALO) is a California-based biopharma technology platform company operating in the United States, Switzerland, Ireland, Belgium, Japan, and internationally. The company’s products are based on the ENHANZE drug delivery technology, a patented human hyaluronidase enzyme that allows the subcutaneous delivery of injectable biologic. This enables the quicker delivery of diabetes insulins.
On November 8, Halozyme Therapeutics, Inc. (NASDAQ:HALO) reported a Q3 bon-GAAP EPS of $0.74 and a revenue of $208.98 million, outperforming Wall Street estimates by $0.23 and $17.81 million, respectively. Revenue over the period climbed 80.4% year-over-year. For the full-year 2022, the company expects a total revenue of $655 million to $685 million, versus a consensus of $661.35 million. The FY 2022 non-GAAP diluted earnings per share are expected to be $2.10 to $2.25 compared to a consensus of $2.04.
Morgan Stanley analyst Andrew Galler on September 9 initiated coverage of Halozyme Therapeutics, Inc. (NASDAQ:HALO) with an Overweight rating and a $50 price target. He called Halozyme Therapeutics, Inc. (NASDAQ:HALO) “the most defensive name in our coverage,” citing its established royalty business, long-term potential for growth, and diversified base business via its acquisition of Antares.
According to Insider Monkey’s third quarter database, 21 hedge funds were long Halozyme Therapeutics, Inc. (NASDAQ:HALO), with collective stakes worth about $212 million. Richard Driehaus’ Driehaus Capital is the largest position holder in the company, with 1.3 million shares valued at $53.2 million.
Artisan Partners made the following comment about Halozyme Therapeutics, Inc. (NASDAQ:HALO) in its Q3 2022 investor letter:
“Despite a better-than-expected quarter and outlook, shares of Halozyme Therapeutics, Inc. (NASDAQ:HALO) have given back some of their YTD gains. We believe the profit cycle ahead is meaningful. The company has a robust pipeline of 16 products and over 10 companies leveraging its ENHANZE® platform including a partnership with Argenx (another top 10 holding) for a subcutaneous format of efgartigimod which could obtain approval in 2023. Today, Halozyme has five royalty products, and we believe this number could triple over the next five years.”
Number of Hedge Fund Holders: 28
Tandem Diabetes Care, Inc. (NASDAQ:TNDM) is a California-based medical device company that designs, develops, and commercializes various products for patients with insulin-dependent diabetes in the United States and internationally. It is one of the best diabetes stocks to monitor.
On November 15, Wells Fargo analyst Larry Biegelsen upgraded Tandem Diabetes Care, Inc. (NASDAQ:TNDM) to Equal Weight from Underweight with a $43 price target. The analyst argues that consensus estimates have reset to more realistic levels after the Q3 earnings report, and valuation has also come down. The analyst noted that shares were previously trading at 3.5-times 2023 consensus sales when he downgraded the stock to Underweight, while Tandem Diabetes Care, Inc. (NASDAQ:TNDM) is now trading at 2.7-times consensus 2023 sales.
According to the third quarter database of Insider Monkey, 28 hedge funds were bullish on Tandem Diabetes Care, Inc. (NASDAQ:TNDM), compared to 32 funds in the prior quarter. Ricky Sandler’s Eminence Capital is the largest position holder in the company, with 1.6 million shares worth $76 million.
Here is what Alger Small Cap Focus Fund has to say about Tandem Diabetes Care, Inc. (NASDAQ:TNDM) in their Q4 2020 investor letter:
“Tandem Diabetes Care provides the t:slim X2 Insulin Delivery System for treating insulin-dependent diabetes. Tandem offers the smallest durable insulin pump available, and with DexCom CGM (continuous glucose monitoring) integration. Tandem has led the development of more automated control of insulin dosing featuring its BasalHQ and Control-IQ algorithms. The company also sells insulin reservoir cartridges and infusion sets for use with its pumps. Tandem stock underperformed after the company announced third quarter results and 2020 guidance that was somewhat weaker than expected. As a durable insulin pump company, Tandem is more tied to new patient demand, which has been suppressed due to the pandemic. There are also some competitive concerns in 2021. with two other established companies planning to launch new products. However, Tandem also has a series of new products for 2021. including its mobile bolus feature, its new t-sport pump and an enhanced version of its current Control-IQ algorithm. We believe these new products are being underappreciated by investors.”
Number of Hedge Fund Holders: 40
Novo Nordisk A/S (NYSE:NVO) is a Denmark-based healthcare company engaged in the research, development, and marketing of pharmaceutical products worldwide. The Diabetes and Obesity care segment provides products in the areas of insulins, GLP-1 and related delivery systems, oral antidiabetic products, obesity, and other chronic diseases. The company’s Q3 net sales grew 28% year-over-year to DKK45.57 billion. Novo Nordisk A/S (NYSE:NVO) is seen as maintaining its lead in the type 2 diabetes therapy market.
On November 3, Credit Suisse analyst Dominic Lunn raised the price target on Novo Nordisk A/S (NYSE:NVO) to DKK 860 from DKK 820 and kept a Neutral rating on the shares.
According to Insider Monkey’s data, 40 hedge funds were long Novo Nordisk A/S (NYSE:NVO) at the end of the third quarter of 2022, compared to 32 funds in the prior quarter. Jim Simons’ Renaissance Technologies is the leading position holder in the company, with 15.30 million shares worth $1.5 billion.
ClearBridge Investments made the following comment about Novo Nordisk A/S (NYSE:NVO) in its Q3 2022 investor letter:
“The proceeds from our repositioning sales continue to be put to work across the Strategy’s secular and structural growth buckets. In particular, we have been adding more to secular, quality compounders such as Danish biotech company Novo Nordisk A/S (NYSE:NVO) and Japanese medical equipment supplier Olympus (OTCPK:OCPNF). These companies have strong balance sheets, good cash flow generation and significant pricing power, characteristics that should enable them to get stronger through the storm impacting international equities.”
Number of Hedge Fund Holders: 44
AstraZeneca PLC (NASDAQ:AZN) is headquartered in Cambridge, the United Kingdom, focused on the discovery, development, manufacturing, and commercialization of prescription medicines. The company’s pipeline includes drugs for diabetic kidney disease and type-2 diabetes. AstraZeneca PLC (NASDAQ:AZN) is one of the premier diabetes stocks to monitor.
On November 4, Citi analyst Andrew Baum opened a “positive catalyst watch” on shares of AstraZeneca PLC (NASDAQ:AZN). He estimated more than a 60% probability that AstraZeneca PLC (NASDAQ:AZN) can conclude its ongoing proton-pump inhibitors multidistrict litigation in New Jersey prior to the first bellwether case, recently delayed until March 2023. This scenario would be “materially positive” to AstraZeneca PLC (NASDAQ:AZN)’s “depressed share price,” contended the analyst.
According to Insider Monkey’s Q3 data, 44 hedge funds were long AstraZeneca PLC (NASDAQ:AZN), compared to 47 funds in the prior quarter. Rajiv Jain’s GQG Partners is the largest stakeholder in the company, with 18.3 million shares worth $1 billion.
ClearBridge Investments made the following comment about AstraZeneca PLC (NASDAQ:AZN) in its Q3 2022 investor letter:
“AstraZeneca PLC (NASDAQ:AZN), a multinational biopharmaceutical company, represents a good addition to the value defense side of our portfolio. We believe AstraZeneca’s durable double-digit earnings growth potential and benign patent expiration risk profile is not reflected in its current valuation, which is at a substantial discount to other “growth” pharmaceutical companies. Combined with the company’s high-potential drug pipeline, particularly in oncology, and management’s history of solid execution, we expect to see the stock rerate higher as the potential of its pipeline materializes.”
Number of Hedge Fund Holders: 55
Medtronic plc (NYSE:MDT) is an Ireland-based company that develops, manufactures, and sells device-based medical therapies to healthcare systems, clinicians, and patients worldwide. The company operates through Cardiovascular Portfolio, Medical Surgical Portfolio, Neuroscience Portfolio, and Diabetes Operating Unit segments. Medtronic plc (NYSE:MDT) offers insulin pumps and consumables, continuous glucose monitoring systems, and smart insulin pen systems. It is one of the best diabetes stocks to consider.
On November 25, Barclays analyst Matt Miksic maintained an Equal Weight rating on Medtronic plc (NYSE:MDT) but trimmed the price target on the shares to $85 from $90. The company’s reduced outlook and “tempered” recovery expectations were unexpected, the analyst told investors. However, Medtronic plc (NYSE:MDT)’s “sales shortfall and tempered recovery expectations were not,” said the analyst.
According to Insider Monkey’s data, 55 hedge funds were bullish on Medtronic plc (NYSE:MDT) at the end of Q3 2022, compared to 54 funds in the prior quarter. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is the largest stakeholder of the company, with 7.16 million shares worth $578.30 million.
In addition to Merck & Co., Inc. (NYSE:MRK), Eli Lilly and Company (NYSE:LLY), and Abbott Laboratories (NYSE:ABT), smart investors are gravitating towards Medtronic plc (NYSE:MDT) as a diabetes play.
Here is what Artisan Partners specifically said about Medtronic plc (NYSE:MDT) in its Q2 2022 investor letter:
“While Medtronic plc (NYSE:MDT)’s procedure volumes recovered to pre-COVID levels, foreign exchange headwinds overshadowed underlying business value growth, and supply chain issues, including those related to China’s lockdowns, impacted the surgical innovations business. The downdraft in the market during the quarter led to a pile-on. We are being patient with our investment in Medtronic because the company continues to be a strong free cash flow generator and is attractively priced, with a FCF yield of 5% on trailing one-year numbers and a dividend yield of 3%. Medtronic is under new management that is focused on growing the company’s top line, reinvesting in R&D, returning cash to shareholders and growing operating profits. We like new management’s strategy and believe new product launches, increased surgery visits, sound M&A transactions and a shareholder returns focus, should reinvigorate the business. We added to our positions in these health care names during the quarter.”
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Disclosure: None. 11 Best Diabetes Stocks To Buy Now is originally published on Insider Monkey.
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