1) The 22nd annual Value Investing Seminar just wrapped up in Italy today...
During it, 17 speakers shared excellent ideas. (I plan on sharing many of these in upcoming e-mails – so stay tuned.)
In my own presentation yesterday, I shared my best financial advice in this slide:
I then gave my outlook for stocks in this next slide:
Lastly, I pitched three stocks I've written about many times in my daily e-mails:
- Joby Aviation (JOBY) (archive here)
- Willis Lease Finance (WLFC) (archive here)
- Eli Lilly (LLY) (archive here)
Up next are the three charts I presented about Lilly, which is my favorite non-tech blue-chip stock...
This stock chart shows how well Lilly has done – and when I first started writing about it:
The share-price appreciation has been driven by soaring revenues and profits. That's thanks to Lilly's market-leading GLP-1 weight-loss drug, tirzepatide, which is marketed under the names Mounjaro and Zepbound.
Take a look at this next chart:
Lastly, I showed that, as fast as Lilly's stock has risen, earnings have grown even faster... such that its forward price-to-earnings (P/E) multiple has contracted to about 33 times this year's consensus analysts' estimates:
That's a high multiple, to be sure. But it's well below the average 40.1 times forward multiple the stock has traded at over the past five years.
And I think Lilly's earnings growth – especially once it gets approval for and launches its new GLP-1 drug, retatrutide (which I expect will happen by next year) – will make today's price look cheap in retrospect.
If you're interested in the full analysis of Eli Lilly from me and my team here at Stansberry Research, check out last month's issue of our flagship newsletter – Stansberry's Investment Advisory. Subscribers can read it here.
If you aren't a subscriber, what are you waiting for?
You can become one and immediately access our entire archive and receive our best ideas every month going forward. You'll also gain access to our full write-up on Lilly – as well as our specific buy advice for the stock.
Find out how to subscribe to the Investment Advisory as part of a special presentation here.
2) After my presentation at the Value Investing Seminar, two members of the audience came up to me and shared their stories...
One guy was 72 years old and looked great. He started taking Zepbound three years ago and has lost 82 pounds – going from 240 to 158 pounds.
He also said he has had no side effects aside from "positives" – his sleep apnea is gone and he has been able to play a lot more tennis.
The other was a woman in her 60s, who has been on semaglutide. This is Novo Nordisk's (NVO) GLP-1 drug, marketed under the names Ozempic, and Wegovy.
She doesn't take it to lose weight – she wasn't overweight, and has only lost five pounds. Rather, she has a family history of terrible cardiac events like heart attack and stroke. In addition, her blood-sugar level was high, making her borderline diabetic – which is how she got insurance coverage for it.
Other than a little discomfort the first few days, she said she has had no side effects and that the results have been incredible: much lower cholesterol and blood sugar and her colitis has gotten better.
Overall, she says semaglutide has been "a miracle drug."
3) Here's an insightful interview on YouTube with a bariatric surgeon who has lost 50 pounds on a GLP-1:
The bariatric surgeon, Dr. Terry Simpson, is a virologist by training. He also has familial hypercholesterolemia, and his father and brother both died of heart disease at a young age.
Here's an excerpt of the summary on what the interview covers:
- How to think about uncertainty in science, and why "con men and religious figures both speak in absolutes"
- The Gila monster origin story of GLP-1 medications, and the difference between native and pharmacological GLP-1
- What food noise actually is, and why [fiber] and probiotics will not replace a weekly injection
- Terry's personal experience on tirzepatide: weight loss, sleep apnea, alcohol, testosterone, stress
- His case for statins as someone with familial hypercholesterolemia...
- A [defense] of Ancel Keys and the Mediterranean diet
4) As of the first of this month, roughly 4 million Americans on Medicare now qualify for certain GLP-1s like Wegovy or Zepbound for only a $50 copay per month.
This is great news.
But instead of celebrating this life-changing (and, in many cases, lifesaving) development, the New York Times recently published this very negative article – filled with frightening (but very rare) stories, with little mention of the miraculous (common) benefits.
Here's an excerpt:
Doctors said that while many patients are eager for these medications and that the health benefits of weight loss can be considerable, there are some unique factors to consider. The risk-benefit calculus for these drugs "is very different for older adults than for younger people, because the risk, the potential for harm, is greater," said Dr. Rozalina McCoy, an associate professor of medicine at the University of Maryland School of Medicine who treats diabetes in older adults.
And as the article continues regarding "bone and muscle loss":
When people lose a substantial amount of weight in a short amount of time, they also lose some muscle. This is true for anyone taking an obesity drug, but is particularly worrying for older adults, who are at risk of frailty and falls. For some older adults, experts said, losing muscle might make it harder to use stairs or to sit or get up from a chair without assistance.
"Are we actually going to make them worse, to a point where now they are no longer able to be independent, no longer able to care for themselves?" said Kathryn Nicole Porter Starr, an associate professor of medicine, geriatrics and palliative care at Duke [University].
Rapid weight loss also decreases bone density. This can contribute to osteoporosis, a condition characterized by brittle bones that are prone to fractures. Postmenopausal women are already at heightened risk for osteoporosis because they lose bone mass as they lose estrogen.
I asked my friend Rich Weil for his comments on this article...
Longtime readers will recognize his name – I've shared his insights on weight-loss drugs a few times over the years. Rich has worked with thousands of obese patients through his business, Transformational Weight Control.
As Rich replied to me:
I have completely lost my patience with negative, fatalistic, sensationalized articles written by journalists who know nothing about science or medicine, quoting physicians who I suspect just like to preach gloom and doom and sound like experts. It's called "negative salience bias": the psychological tendency to disproportionately focus on, remember, and give more weight to negative or threatening information than to positive or neutral details. There's also a bias against medication in general and, of course, about obesity.
These are the safest and most effective weight-management drugs ever. They've been around since 2005 and address the greatest international public health crisis we have ever seen. Yet we must endure the constant onslaught of profoundly misleading articles.
Rich acknowledges that some people have negative effects. But as he told me, these can be mitigated by proper advice, support, and care:
It's true that a minority of people taking these drugs suffer from poor nutrition and/or have unpleasant side effects (which generally go away), and a much smaller percentage have negative adverse events. But this is usually because they haven't been properly educated about how to take the drugs safely and effectively and have no ongoing support.
Ideally, every patient starting a GLP would see a GLP-experienced registered dietitian (like we do at Transformational Weight Control) who will take the time to educate their patients properly about how to take the drug and how to eat and drink while taking them. In our program, where the average age is 62, they see the dietitian, either privately or in the group, have total and unlimited access to healthcare professionals, plus they are in a group with 22 peers also taking the drug. They get five hours a month of group counseling, education, and support, with two very GLP-experienced healthcare professionals. To my knowledge, it's the highest standard of care in the country.
Our average weekly weight loss – and this includes patients at various stages of the GLP journey, up to two years or more – is 0.56 pounds per week. I watch their weight EVERY week and no one is losing more than two pounds per week. I make sure of it, and intervene if they are losing weight too quickly. They also learn how to eat to keep their calories up so they do not get dehydrated nor malnourished. We help them manage/eliminate side effects, if they occur at all, and offer counsel and education on [over-the-counter] and [prescription] remedies if necessary. There's a good reason our patients have a smooth experience with the drugs and stay out of the emergency room.
Rich is especially fed up with most doctors. As he continued:
If a doctor doesn't have enough time, interest, experience, or expertise, then they shouldn't prescribe these drugs, and instead refer the patient to an obesity specialist. I am so sick of medical hubris – their arrogance overwhelms me. They are talking nonsense in this article, scaring people about this class of drug. Giving a patient a pamphlet about how to take a GLP is not counseling and borders on malpractice. Can you imagine giving a diabetic patient insulin and a pamphlet and sending them on their way? This is no different.
Here's my suggestion: The doctors should shut up, stop talking to the press and sounding like they know what they are talking about. They are raising unnecessary alarm and concern for patients about an extremely safe and highly effective class of drugs. Instead, they should get back to the business of providing proper care for their GLP patients – like what they are supposed to do.
I am tired of arguing with doctors about this. Most have limited/no hands-on experience and don't spend the time to properly counsel their patients. Seeing 20 patients with obesity every week for five minutes and prescribing a GLP doesn't meet a basic standard of care nor does it qualify as hands-on experience. It borders on malpractice. Every physician in this country prescribing these drugs should register for the American Board of Obesity Medicine certification course. It should be mandatory if a physician is going to treat patients with obesity.
Thanks for your comments, Rich!
And that's not all...
Rich also said he would send the NYT article to his patients and ask them to respond with their comments – which he said I could share with my readers (with those folks' permission).
Rich did just that. Here's what three of his patients had to say:
- "I am a 68-year-old woman. These drugs are exactly what I waited for my entire life. This article is dangerous to those with chronic obesity who believe its flawed contents and continue to suffer from the REAL dangers of obesity.
"The only cliff these doctors should be worried about is the one THEY should be jumping off. This article is pure rubbish. GLP-1s are a game changer that can help people, like me, handle this chronic disease effectively and more easily.
"With the proper education, like I receive at Transformation Weight Control, none of these 'dramatic effects' occur. I lose weight slowly, yet steadily, and perform resistance exercise to ensure the effects of general weight loss does not adversely affect my strength. I also have learned effective weight-management techniques to help ward off weight regain when I reach a plateau. Education is the key word."
- "This article is poppycock. I am 60 years old and have been taking Mounjaro for three years. I have lost 120 pounds. The weight loss has allowed me to increase my muscle mass because I can now exercise without pain due to the anti-inflammatory effects of the drug.
"My new exercise habits are also strengthening my bones. I am very careful to keep hydrated, I get enough protein, and my provider orders labs regularly to check my health. My provider and I plan to keep me on this drug for the foreseeable future because it has reduced my risk of heart disease, diabetic-related complications, and has improved my lifestyle tremendously."
- "This article is more of a hit piece than a truly balanced, critical article.
"The one thing I noticed while reading it is that people need to be monitored. If they take other drugs, dosage needed to be checked as weight drops. You can't just give someone a GLP-1 and send them on their way. There needs to be routine follow-up care.
"For me the biggest benefit has been not feeling hungry and not having constant 'food chatter' makes it hard to eat wisely. The article seems to speak in broad terms and focuses on possible problems, but didn't say how those issues could be resolved."
I hope these stories help you understand why I've long called GLP-1 drugs "miraculous" and why I'm convinced a majority of Americans – not just overweight ones – will be taking them... with Lilly as the primary beneficiary.
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.
P.P.S. In the first slide of my presentation yesterday, I shared a picture from the first Value Investing Seminar in Italy 22 years ago, and two recent ones. My girls certainly have grown up!
And below are some pictures of me with my co-hosts, Ciccio Azzollini and Roberto Russo – and with Ciccio's family.
Today, my wife Susan took my parents to a farm where they petted cows and learned how to make mozzarella cheese. That was followed by a visit to the beautiful city of Ostuni, which is known for its whitewashed old town.
Here are the pictures:
