Subject: Re: Growth Stalwarts marked down
I was looking at NVO today. I think it's probably cheap? However, some things trouble me.

1) An effective oral competitor for weight loss could shred about 50% of their revenue in less than a year. NVO is not cheap at all if that happens. It's a lot easier to manufacture, distribute and persuade people to try a pill instead of a jab.

2) The Trump Factor, it's not a small risk to invest in non-US pharma. Not just tariffs, but also Trump's claim he intends to push prices down.

3) IIRC 28% withholding tax on Danish dividends? For anyone buying Novo Nordisk ADR on the US market and living outside the US, a further 15-30% tax from the US too.
Adjusting the P/E a bit to account for the pain and suffering involved in getting dividends, it doesn't seem quite so cheap.

4) Failure of their product to help Alzheimers feels vaguely troubling, given the association of Alzheimers and diabetes. Occasionally you get a medicine that e.g. gives people great numbers on their bloodwork or whatever(e.g. fibrates) but it doesn't actually help that much in the end.

I guess it depends if it's a long term hold, or a short term trading position, that you have in mind e.g. dividends here are fairly inefficient vs capital gains.

TRS