Topic: How To Invest

Q: Pat: Why has Novo Nordisk dropped so much, and is it now a buy? Thanks

Article Excerpt

A: Novo Nordisk A/S (ADR), $35.78, symbol NVO on New York (Shares outstanding: 2.0 billion; Market cap: $91.2 billion; www.novonordisk.com), is a major producer of diabetes-care products, including insulin. Based in Denmark, it also makes products for hormone replacement therapy and the treatment of blood coagulation disorders. The company controls 50% of the global insulin market. It gets roughly 50% of its sales from North America, followed by Europe, 18%, China, 11%, and other regions, 21%. In the three months ended September 30, 2016, Novo’s revenue rose 2.8%, to 27.5 billion Danish Krone ($4.1 billion U.S.) from 26.8 billion ($4.0 billion U.S.) a year earlier. Earnings rose 20.8%, to $0.58 U.S. per ADR from $0.48. Despite the improved results, the stock took a big plunge, from over $41 to as low as $30.89. That’s because the company slashed its long-term forecasts for profit growth in half because of pricing pressure in the U.S., its largest market. While Novo controls almost half the global market…

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