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Retail Investors Swarm Eli Lilly On The Clearance Of A Weight-Loss Medication

Retail Investors Swarm Eli Lilly On The Clearance Of A Weight-Loss Medication
Retail inflows into Eli Lilly reached a record high of over two years in November as tiny investors snapped up the shares following the much-awaited approval of the weight-loss medication Zepbound by the giant American pharmaceutical company. According to statistics from Vanda Research, daily net purchases reached their highest levels since January 2021 on Nov. 8, when Zepbound was cleared in the U.S. and the U.K.
The obesity treatment market, estimated to be worth $100 billion, is led by Lilly and Novo Nordisk, which have stimulated interest in the healthcare sector among retail investors once again.
"During the COVID period, retail investors were piling into healthcare because of the vaccines and after that there was a bit of a hangover of purchases. But now with these (weight-loss) drugs, some of it is returning," said Marco Iachini, senior vice president of research at Vanda Research.
The vice president of stock research at CFRA, Sel Hardy, stated that retail investors are currently "catching up" with institutional investors.
"(Eli Lilly) is almost becoming a household name. A lot of people know about the obesity drug now and the increasing interest and its success," added Hardy.
In the third quarter, major investors including BlackRock and JPMorgan Chase raised their stakes in the stock.
According to LSEG data, Lilly's shares have increased 61% year to date and are now trading at almost 50 times their 12-month projected earnings, compared to the U.S. healthcare sector's 27.57 times.
According to Vanda data, net retail purchases of Novo Nordisk shares reached an all-time high in October after the company's diabetes medication Ozempic demonstrated early effectiveness in a trial intended to treat kidney failure in diabetic patients.
This year, Novo's American Depository Receipts (ADRs) have increased by 47%.
As the holiday season draws near, there has been a recent fall in total retail flows to U.S. exchanges, despite the spike in interest in weight-loss drugmakers.
Iachini continued, "Yet the inflows are still below some of the popular tech stocks, like Roblox and AMC."

Christopher J. Mitchell

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