Here’s Eli Lilly’s competitive advantage in GLP-1 obesity drugs and Abbott’s secondary play

Every weekday, CNBC Investment Club with Jim Cramer publishes Homestretch—an actionable afternoon update just in time for the final hour of trading on Wall Street. (We are no longer recording audio so we can get this new written feature to members as soon as possible.) Inflation Easing: Stocks were mostly higher on Thursday, although the Dow faced some pressure. Stocks looked lower before the open, but got a boost after the core personal consumption expenditures (PCE) price index rose 0.4% month-on-month and 2.8% year-on-year in January, in line with expectations. “The fact that S&P 500 futures fell sharply ahead of PCE is a reminder that negative sentiment is still out there,” Jim Cramer said Thursday. On the last day of February, the Dow, S&P 500 Both the index and the Nasdaq are set to post strong monthly gains. Semiconductor stocks surge: Semiconductor stocks were a bright spot among technology stocks, outperforming software and other technology hardware stocks. The group was likely reacting to a report from Citi analysts that said they “remain extremely bullish on the semi-finals.” “Chris Danely at Citibank is helping get to the semifinals,” said Jim Cramer. “Don’t forget Broadcom, one of the companies he bought.” Citi’s favorite AI companies are club names Nvidia and Broadcom and Bullpen stock Advanced Micro Devices. Danely’s top pick for DRAM recovery is Micron. Dividend increase: Club name Eaton hit another all-time high on Thursday, announcing a 9% increase in its quarterly dividend. The dividend increase will increase its dividend yield from 1.19% to 1.3%. Increased revenue is always appreciated, but Eaton is more of a growth industrial company than a value stock. Its power management solutions fit into a number of different megatrends, which is why we named it one of the club’s 12 core assets at our annual meeting last Saturday. On Deck: We’re almost through earnings season. But there are still a few companies reporting after the bell, including Zscaler, Dell Technologies and Autodesk. GLP-1 Fever: On Thursday at 10 p.m., we’ll watch CNBC’s new original show “Big Shot: The Ozempic Revolution.” The focus of the documentary will be on Novo Nordisk’s Ozempic, which became the name associated with this new class of GLP-1 anti-obesity injectables. (Technically, Ozempic is Novo’s diabetes treatment, and Wegovy is Novo’s weight-loss drug.) However, Cramer said, “If you’re going to take these drugs, don’t forget you need protein, and the club name Abbott Laboratories There’s a protein quick supplement that’s going to be in high demand.” As for Eli Lilly, we think one of the reasons it’s built a wide moat around GLP-1 (Zepbound for obesity and Mounjaro for diabetes) is It has invested billions of dollars in production capacity. Eli Lilly’s lead is why we shed Viking Therapeutics’ Phase 2 drug as a significant competitor. Viking’s balance sheet is not equipped to compete with Novo and club name Lilly. Following recent surges (up 121% on Tuesday and 11% on Wednesday), shares of biotech company Viking fell 15.5% on Thursday after the company raised $550 million through the issuance of nearly 6.5 million shares. “Viking’s products are a reminder that it is unsafe to speculate in companies that do not have the capital to compete with Eli Lilly and Company,” Cramer said. (See here for a complete look at stocks in the Jim Cramer Charitable Trust List.) As a subscriber to Jim Cramer’s CNBC Investing Club, you will receive trade alerts before Jim makes his trades. Jim waits 45 minutes after sending a trade alert before buying or selling stocks in his charitable trust portfolio. If Jim talked about a stock on CNBC TV, he would wait 72 hours after issuing a trade alert before executing the trade. The investment club information above is subject to our Terms and Conditions and Privacy Policy and our Disclaimer. No fiduciary duty or obligation shall exist or arise upon your receipt of any information relating to the Investment Club. No specific results or profits are guaranteed.

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