- The Street Sheet
- Posts
- 🩺 Weighing in on Weight-Loss Drugs
🩺 Weighing in on Weight-Loss Drugs
Plus, global debt levels have hit a stunning record high
Happy Wednesday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.
🟥 | US Stocks Fell on Wednesday, despite Nvidia continuing its rally and adding 1%. These losses come after the 10-year Treasury note yield ticked higher for a second day.
📈 | One Notable Gainer: Abercrombie & Fitch’s stock jumped 24% after the retailer posted 22% fiscal first-quarter sales growth, which far surpassed expectations.
📉 | One Notable Decliner: Shares of American Airlines fell 14% after the company announced a surprising guidance cut and announced that its chief commercial officer, Vasu Raja, is leaving.
🩺 | Tomorrow's Trade: Weighing in on Weight-Loss Drugs. Scroll down for more.
Plus, get the full name and ticker symbol behind what could soon be the #1 uranium stock of 2024.
YESTERDAY’S POLL RESULTS
🟨🟨🟨🟨⬜️⬜️ Novartis (NVS)
🟩🟩🟩🟩🟩🟩 Eli Lilly (LLY)
🟨🟨⬜️⬜️⬜️⬜️ Bristol-Myers Squibb (BMY)
S&P 500 Heatmap. Credit: Finviz
All Stock Heatmap. Credit: Finviz
Global ADR snapshot. Credit: Finviz
MARKET MOVERS
MRO (+8%) Shares of Marathon Oil surged after ConocoPhillips announced plans to acquire the company in a $17 billion deal to bolster shale assets (CNBC)
DKS (+16%) Dick’s Sporting Goods’ stock sprinted into record territory after the sporting goods retailer reported another big quarterly earnings beat (MW)
CHWY (+27%) Online pet supply retailer Chewy reported first-quarter earnings that beat estimates and showed an increase in Autoship sales (Barron’s)
UNH (-4%) Shares of UnitedHealth Group fell after an unnamed executive said they see a “disturbance” coming in the firm’s Medicaid business (Investing.com)
INSM (+11%) Pharmaceutical company Insmed reported positive results in its study into treating the chronic lung condition bronchiectasis (YF)
TOGETHER WITH INVESTING TRENDS
According to the Wall Street Journal, "Uranium is finally running red hot, and miners can't keep up." That's why uranium prices soared to their highest price in 16 years at $105/Lb.
And there's one uranium company that could be sitting on a fortune. 2.4 MILLION pounds of uranium buried beneath a five square mile patch of land.
OVERHEARD ON THE STREET
CNBC: Mining giant BHP abandoned its bid to takeover Anglo American after the latter rejected a request to extend takeover talks.
CNN: Amazon Fresh is cutting prices on 4,000 grocery items, joining retailers like Target and Walmart in their bids to entice price-conscious consumers.
The Verge: Verizon and AST SpaceMobile have a $100 million deal to create a satellite cellular service that provides 100% coverage of the continental US.
CNN: The Consumer Confidence Index for this month climbed to 102, up from 97.5 in April, marking the first increase in four months.
CNBC: Telehealth company Ro launched a tracker to help patients find a popular class of weight loss drugs called GLP-1s amid shortages of those treatments.
TOMORROW’S TRADE IDEA, TODAY
Creating New Customers
Ozempic and other GLP-1 drugs can help patients lose some weight, but they aren’t a guaranteed ticket to health. Even so, the drugs could help severely overweight patients lose enough to qualify for life-changing surgeries.
Some experts predict that weight-loss drugs could help more people qualify for bariatric surgery and sleep apnea treatments. This opens the door for medical device companies to benefit from increased demand for the two treatments.
Mizuho Securities analyst Anthony Petrone is watching the trends surrounding bariatric surgery and sleep apnea treatments to see if they hold an opportunity. Should a significant trend materialize, he sees a few companies benefitting.
No Evidence Yet
So far, there hasn’t been much of an uptick in surgeries for either condition. According to Intuitive Surgical (ISRG), demand slowed at the end of last year and this year’s first quarter saw flat growth.
Inspire Medical (INSP), which produces an implantable device that treats sleep apnea, has seen its shares lose over 15% year-to-date. This comes as investors fear that GLP-1 drugs will result in fewer patients seeking treatment for sleep apnea and other weight-related issues.
However, the company’s CEO believes the drugs can serve as a tailwind for the apnea implant. He expects them to help patients lose enough weight to qualify for Inspire’s device.
Potential Upside
Petrone has given Inspire’s stock a buy rating with a $250 price target, a 58% upside from Tuesday’s close. The analyst believes the stock was oversold following poor first-quarter results and he expects a rebound.
Petrone likes that the FDA opened the door for more patients to qualify for Inspire’s device. He expects more health insurance companies to provide coverage to treat more patients with the device in the future.
Weight-loss drugs are certainly shaking up the market, and for companies like Inspire, this could be a blessing or a curse. The outcome remains to be seen, but with the recent dip in share price, there could be some potential.
Are you bullish or bearish on Inspire Medical (INSP) over the next 12 months? |
TOGETHER WITH INVESTING TRENDS
When picking top natural resource investments, it's all about the demand. The more demand you have for a commodity, the more prices soar.
As of February 2024, in the US alone, there are 62 new Nuclear Reactors under construction. Sending demand for Uranium through the roof.
ON OUR RADAR
CNBC: According to the latest May report from the Institute of International Finance, the global debt has grown to $315 trillion.
WSJ: The IMF raised its Chinese economic growth forecast, now projecting 2024 gross domestic product growth at 5%, up from the April forecast of 4.6%.
NYP: Shark Tank star Kevin O’Leary announced he wants to buy TikTok with the help of investors willing to pitch in for a take in the Chinese-owned app.
WSJ: Donald Trump and Elon Musk have discussed a possible advisory role for the Tesla leader should Trump reclaim the White House.
Reuters: The Biden administration proposed expanding tax credits to boost a wider range of clean energy technologies, including nuclear fission and fusion.
Reply