We’re making our first Bullpen update of 2024. The Bullpen is a collection of stocks identified by the CNBC Investing Club team as having the potential to join Jim Cramer’s Charitable Trust. We’re highlighting the four most interesting investment opportunities we found out of the handful of company CEOs Jim interviewed at this week’s JPMorgan Health Care Conference this week in San Francisco. Abbott Labs: Long-time followers of the Charitable Trust, the portfolio we use for the Club, know we had a nice run in Abbott Labs from 2017 through early 2022 and exited our position near $120 per share to reduce the portfolio’s exposure at the time to Covid winners. The stock has essentially traded sideways since then, but we think enough time has passed to take another look at this leader in medical devices and other health-care solutions because it finally may be past its post-pandemic hangover as testing revenues become less of a driver of earnings. The stock was working toward this path over the summer but then Novo Nordisk announced the results of a trial that evaluated weight loss drug Wegovy’s ability to reduce negative cardiovascular outcomes, and in three months Abbott lost about 20% of its value. What the market assumed is that the rise of these GLP-1 drugs (Club name Eli Lilly has two of them on the market ) which help patients manage diabetes better, lose weight, and generally become healthier, would fundamentally disrupt Abbott’s leading diabetes and cardiology units. ABT 5Y mountain Abbott Labs 5 years After the initial slide, the stock started to recover as the market started to realize that the use of GLP-1s and Abbott’s FreeStyle Libre continuous glucose monitoring system was not a zero-sum game. As it turns out, the company’s studies show GLP-1 adopters are seeing better results when they use Libre along with the drugs, suggesting the existential risk to its business is overblown. To be fair, we are still cautious about the impact this new class of…
Read the full article here
Leave a Reply