Baron Funds: “Eli Lilly (LLY) has a Healthy Base Business”

Baron Funds, an asset management firm, published its “Baron Health Care Fund” second quarter 2022 investor letter – a copy of which can be downloaded here. In the quarter ended June 30, 2022, Baron Health Care Fund (the “Fund”) declined 10.00% (Institutional Shares), compared with the 7.43% decline for the Russell 3000 Health Care Index (the “Benchmark”) and the 16.10% decline for the S&P 500 Index. Since its inception (April 30, 2018), the Fund increased 15.00% on an annualized basis compared with the 11.96% gain for the Benchmark and the 10.91% gain for the S&P 500 Index. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, Baron Health Care Fund mentioned Eli Lilly and Company (NYSE:LLY) and explained its insights for the company. Founded in 1876, Eli Lilly and Company (NYSE:LLY) is an Indianapolis, Indiana-based pharmaceutical company with a $289.4 billion market capitalization. Eli Lilly and Company (NYSE:LLY) delivered a 10.28% return since the beginning of the year, while its 12-month returns are up by 15.34%. The stock closed at $304.61 per share on August 12, 2022.

Here is what Baron Health Care Fund has to say about Eli Lilly and Company (NYSE:LLY) in its Q2 2022 investor letter:

Eli Lilly and Company is a global pharmaceutical company focused on discovering, developing, and selling medicines for patients in the therapeutic areas of diabetes, oncology, immunology, and neuroscience. Stock performance was strong due to positive study results for Eli Lilly’s drug Tirzepatide (subsequently branded Mounjaro), which delivered up to 22.5% weight loss in adults with obesity. We think Tirzepatide is in the early innings of adoption in a large obesity market where penetration of anti-obesity medications is currently low. We continue to think Eli 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 solid revenue and earnings growth over many years.”

Our calculations show that Eli Lilly and Company (NYSE:LLY) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Eli Lilly and Company (NYSE:LLY) was in 53 hedge fund portfolios at the end of the second quarter of 2022, compared to 61 funds in the previous quarter. Eli Lilly and Company (NYSE:LLY) delivered a 6.25% return in the past 3 months.

In June 2022, we also shared another hedge fund’s views on Eli Lilly and Company (NYSE:LLY) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.

Disclosure: None. This article is originally published at Insider Monkey.