In our first of seven Stockpicking Challenge matchups, the energy drink maker squares up against the weight-loss drug manufacturer.
March 4, 2024
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Our first head-to-head matchup is in the health care sector, between Celsius Holdings (Nasdaq: CELH) and Novo Nordisk (NYSE: NVO).
Consumers have shown a growing preference for energy drinks, as a sweeter and more-satisfying caffeine alternative to coffee or sodas. New distribution deals are accelerating sales and are spiking the returns for investors.
Elsewhere, several GLP-1 inhibitor drugs that were originally designed for diabetes are now being used for weight loss. Even without full insurance reimbursement, they’ve already become some of the pharmaceutical industry’s best-selling drugs of all time.
Do you think the energy drink provider or the diabetes and weight-loss drug manufacturer is the better stock to invest in during 2024?
Please vote in our poll below! We provide commentary on each of these companies, and we’ll include the one that receives more votes in our 7investing Stockpicking contest portfolio!
Our 2024 @7investing Stockpicking Competition is now underway!
Submit your own stock ideas to win a $1,000 Amazon gift card and a free year of both @7investing and @stockcardhq!https://t.co/uNIDieNKaG
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2023 Total Return: 57%
2024 YTD Return (as of 3/4/24): 54%
Energy drinks give you a pep to your step, but they’ve also given quite a boost to investors.
You might not know it, but Monster Beverage (Nasdaq: MNST) was the best-performing stock of the past 30 years. Its 200,509% total gain since 1994 dwarfs not only other drink makers like Coca Cola (NYSE: KO) and Pepsi (Nasdaq: PEP), but also America’s fastest-growing tech giants like Amazon (Nasdaq: AMZN), Microsoft (Nasdaq: MSFT), and Alphabet (Nasdaq: GOOGL).
A simple $1,000 investment in Monster back in 1994 would now be worth more than $2 million.
It seems nearly impossible for Monster to continue to hold that title for the next 30 years as well. Monster today has a $60 billion market capitalization and its products are universally-available.
Yet perhaps there’s a way to follow this same thesis, and to get in on the ground-floor with the next big winner. When it comes to energy drinks, Celsius Holdings could be the next big thing.
Celsius is positioning itself as a healthier alternative to Monster and Red Bull — with drinks that have zero-sugar, have added vitamins, and are made “as naturally as possible.” This healthier branding has helped them appeal to a wider audience, including women, who weren’t quite as interested in the testosterone-fueled marketing done by Monster or Red Bull.
Celsius landed a lucrative distribution partnership with Pepsi in August 2022. Celsius gained access to a truly global distribution network, while Pepsi got an 8.5% ownership stake and a seat on the Board.
The partnership has been a win-win for both parties. Sales are growing at triple-digit rates, and the company has now reached profitability.
Celsius may have a long runway ahead of it though, as its sales are still less than half of Monster’s even in its most mature core market of North America. It has recently inked a new deal to be prominently featured in Dunkin Donuts and to introduce a new energy bar product. It seems likely that there’s plenty more growth for this highly-energized stock in 2024.
2023 Total Return: 54%
2024 YTD Return (as of 3/4/24): 24%
A new wave of weight loss drugs could change everything for doctors.
Popular drugs such as Ozempic and Wegovy — which are manufactured by the Big Pharma powerhouse Novo Nordisk — are taking the world by storm when it comes to treating obesity.
These new drugs release satiety hormones that are delivered to our brain, to help us better recognize when we’ve actually consumed enough calories to truly be full. In many cases, the drugs result in patients losing 20% of their weight or more, already putting them at parity with the much-more-expensive bariatric surgery. The American Heart Association has endorsed the drugs as well, reporting that healthy weight loss can reduce the risk of heart attacks and strokes by up to 20%.
From an investing perspective, these drugs has been game-changers for Novo. Based in Denmark, its previous NovoRapid and Victoza drugs have helped diabetics deal with their chronic condition for the past one hundred years. More recently, Ozempic was already the world’s best-selling diabetes medication last year — with sales that grew a whopping 60% to $14 billion USD in 2023.
Yet Novo’s obesity care drug line is growing even faster. Together, Ozempic and Wegovy sales increased 147%, to $6 billion in total sales last year.
There have been globally-reported shortages in the availability of these drugs, as supply is vastly outpacing demand on all continents. Clinics who prescribe the weight-loss medications have announced month-long wait lists for new patients to even be seen. And even though weight-loss medications aren’t often reimbursed by insurance (as they’re often still considered elective, rather than due to medical need), many patients are willing to pay the $800+ per month out-of-pocket anyway.
Novo Nordisk is already Europe’s largest company. With a market capitalization of $571 billion, it’s hardly a hidden gem.
Yet with the insatiable demand for its weight-loss products growing faster ever year, this stock seems bound to supersize investment returns in 2024 and beyond.
Is Celsius Holdings or Novo Nordisk the better stock to buy in 2024? Please vote now in our poll below!
Our 2024 @7investing Stockpicking Competition is now underway!
Submit your own stock ideas to win a $1,000 Amazon gift card and a free year of both @7investing and @stockcardhq!https://t.co/uNIDieNKaG
We'll also submit a 7investing entry into the contest for fun — which will…
— 7investing (@7investing) March 4, 2024
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