LRT Capital Management, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. A return of +30.47% was recorded by the LRT Economic Moat strategy year-to-date, putting its 24-month return to +4.34%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
LRT Capital Management, in its Q4 2021 investor letter, mentioned Novo Nordisk A/S (NYSE: NVO) and discussed its stance on the firm. Novo Nordisk A/S is a Bagsværd, Denmark-based multinational pharmaceutical company with a $238.0 billion market capitalization. NVO delivered a -6.90% return since the beginning of the year, while its 12-month returns are up by 50.64%. The stock closed at $104.27 per share on March 03, 2022.
Here is what LRT Capital Management has to say about Novo Nordisk A/S in its Q4 2021 investor letter:
“Novo Nordisk is the global leader in insulin, which is, sadly, a growing business as more and more people around the world suffer from diabetes. Millions of people need daily injections of insulin to stay alive, a number that, unfortunately, is likely to continue to grow by millions more in the coming decade. It may seem at first glance that insulin should be a commoditized business, after all, it was discovered and synthesized over a hundred years ago, but nothing could be further from the truth. There are many types of insulin and Novo Nordisk has spent billions on R&D over the years to develop new products. On February 11th, the company reported favorable results from a phase-3 trial of Semaglutide, a drug that is currently used for Type 2 diabetes treatment. The study evaluated the use of Semaglutide for weight loss treatment in non-diabetic patients and found a significant impact on weight loss for patients receiving Semaglutide vs. the placebo control group. If Semaglutide is approved for weight loss treatment, we expect it will be meaningfully accretive to the company’s bottom line.
The company’s proprietary product line supports returns on invested capital of over 40%, and while sales growth is relatively slow (+6% annualized CAGR over the past decade), the company’s shares trade at a reasonable valuation of only 22x forward earnings. For a company with an extremely predictable business, high returns on capital, and an easily forecastable future, we believe this to be highly attractive.”
Our calculations show that Novo Nordisk A/S (NYSE: NVO) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. NVO was in 28 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 27 funds in the previous quarter. Novo Nordisk A/S (NYSE: NVO) delivered a -2.22% return in the past 3 months.
In December 2021, we also shared another hedge fund’s views on NVO in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.