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Ahknaten and NVO

Rating: 1.07 (30 votes)    Vote: Terrible (-3)Worse (-2)Bad (-1)So-so (0)Good (+1)Better (+2)Best (+3)
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Honestly, I'm not one to write long reports about stocks, and so I thought I'd just say a few words about Novo Nordisk (NVO). I like it.

NVO is involved with creating products for diabetes and biopharmaceuticals. The stock is a momentum play, but it works as a value play as well. When I create a DCF analysis on it, I come out with a target price of $169 (which is much higher than the current price). It has nice PE, ROE, ROA, gross margins and growth. Few analysts cover the stock, but as it gains exposure it could gain a few more analysts and that could create a nice catalyst as well.

I have a few concerns with NVO as well. Recently the Capital Group Companies increased their holdings from 10-15% in NVO. I wish I new a bit more about that firm. That sort of news could be good or bad depending on their motivation. The stock can be illiquid at times, but that could get alleviated with a stock split - and a stock split could create a bit more liquidity and attract some other investors.

In short, I like NVO but it's not my favorite stock. I think it could do well in a health portfolio or a momentum-based strategy.

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