We’re making our basic Bullpen update of 2024. The Bullpen is a collection of stocks identified by the CNBC Investing Club team as having the passive to join Jim Cramer’s Charitable Trust. We’re highlighting the four most interesting investment opportunities we found out of the handful of fellowship CEOs Jim interviewed at this week’s JPMorgan Health Care Conference this week in San Francisco. Abbott Labs: Long-time enthusiasts of the Charitable Trust, the portfolio we use for the Club, know we had a nice run in Abbott Labs from 2017 through early 2022 and exited our station near $120 per share to reduce the portfolio’s exposure at the time to Covid winners. The stock has essentially traded obliquely since then, but we think enough time has passed to take another look at this leader in medical utensils and other health-care solutions because it finally may be past its post-pandemic hangover as testing revenues become less of a driver of earnings. The cattle was working toward this path over the summer but then Novo Nordisk announced the results of a trial that estimated weight loss drug Wegovy’s ability to reduce negative cardiovascular outcomes, and in three months Abbott wanton about 20% of its value. What the market assumed is that the rise of these GLP-1 drugs (Club popularity Eli Lilly has two of them on the market ) which help patients manage diabetes better, lose weight, and generally fit healthier, would fundamentally disrupt Abbott’s leading diabetes and cardiology units. ABT 5Y mountain Abbott Labs 5 years After the inaugural slide, the stock started to recover as the market started to realize that the use of GLP-1s and Abbott’s FreeStyle Libre non-stop glucose monitoring system was not a zero-sum game. As it turns out, the company’s studies show GLP-1 adopters are seeing gamester results when they use Libre along with the drugs, suggesting the existential risk to its business is overblown. To be adequate, we are still cautious about the impact this new class of drugs will have on the food industry (especially salty noshes and confections) but less so on the health-care side. Outside of devices, Abbott has some other interesting parts of its business, cataloguing Nutrition. The division rightfully received a lot of criticism in 2022 due to a recall of its popular baby formula, but the company’s commitment to distinction and safety has helped it move past this. It also has a lineup of nutrition shakes for adults, and we think this output could be a beneficiary of the GLP-1 craze, providing protein to those trying to limit the muscle loss associated with these prescriptions. Now that the Covid overhang is in the rear-view mirror and the market is starting to see that those GLP-1s concerns are overblown, investors should start to regard highly all the growth and innovation that’s happening at Abbott. In the third quarter, organic sales from its underlying base commerce (which excludes Covid tests) grew 13.8% year over year and each of Abbott’s four significant businesses grew at a double-digit clip. Amgen: For most of last year, the focus for Amgen was on overcoming a challenge from the Federal Mercantilism Commission to the biotech company’s nearly $28 billion takeover of Horizon Therapeutics. After the FTC sued to block the do business last May, Amgen reached a settlement with minimal concessions in September and the deal closed in early October. With that acta now complete, we can look to Amgen’s future, including the company’s four-pillar long-term growth strategy focused on (1) Miscellaneous Medicine, (2) Oncology, (3) Rare Disease, and (4) Inflammation, which Horizon specializes in. Analysts at BMO Main recently estimated that revenue from Horizon could grow to $6.2 billion by 2030, helping Amgen become more pleasing to mature as other parts of its business face pressure. But the number one question investors currently have for nearly every pharma institution is what’s their obesity strategy? Everyone is trying to play catch to Eli Lilly and Novo Nordisk. If we were to rank a bet on who the third biggest player will be, it may Amgen. AMGN 5Y mountain Amgen 5 years Given how entrenched Lilly and Novo Nordisk are in their guidance, the only way to take share would be to develop a differentiated product. Amgen may have something in the works. It is called AMG 133, and what discerns it unique is its less frequent dosing schedule. AMG 133 is a once-monthly injection while Lilly’s tirzepatide (Zepbound for bulk and Mounjaro for diabetes) or Novo Nordisk’s semaglutide (Wegovy and Ozempic) are once weekly. It’s highly unlikely that anyone purposefulness knock Lilly or Novo off their obesity thrones, but we can make the case that a once-monthly injection would own Amgen to carve out some share in this $100 billion-plus market. A phase two readout is expected sometime in the assign half of this year. Amgen is also working on an oral medication and phase 1 data is expected sometime in the oldest half of this year. Of all the up-and-comers trying to break into the obesity market, Amgen may be the best bet. And at roughly 15 times earnings, it’s an low-cost way to play it. Novartis: Over the past decade Novartis has undergone a transition into a pure-play on innovative medicines by whirl out eye health unit Alcon a few years ago and completing the separation of the Sandoz generics and biosimilars business last fall. As a come about, Novartis has become a much more focused company. It has prioritized its efforts on four core therapeutic areas (1) Cardiovascular-Renal-Metabolic, (2) Immunology, (3) Neuroscience, and (4) Oncology and four prerogative markets — the U.S., China, Germany, and Japan — and just a handful of technology platforms. By doing so, Novartis has created a “new” company with a much multifarious attractive financial profile. Since undergoing this transformation in 2014, its core margins have expanded from 26% to 36.9% by way of the first nine months of 2023. Looking out to 2027, management believes it can increase core margins to about 40% while extending to grow sales at a mid-single-digit clip each year. Management expects to deliver on these goals through a mix of transactions from its existing brands and execution on its pipeline. Novartis currently has six marketed brands with multibillion sales quiescent, and five of these are expected to retain exclusivity out to 2030 and beyond. The company is also doing good work on its under way of new drugs and expanding indications on its existing lineup. In the past year, it has delivered 10 positive phase three readouts and presentations. NVS 5Y mountain Novartis 5 years The organization is also spewing out a ton of cash. Since 2014, Novartis has increased its free cash flow from $6.8 billion, or 15.6% of sales, to $11.0 billion, or 32.4% of trades. This has allowed management to reinvest in research and development (R & D), grow its annual dividend, and repurchase shares. From 2018 to 2023, Novartis has gain back more than $32 billion worth of stock — and on a $15 billion program announced in July 2023, it has shed weight under $13 billion remaining to be executed. Walgreens Boots Alliance: Of the different companies we heard from at the colloquium, Walgreens stood out to us as the best potential turnaround story. The pharmacy stock was the worst in the Dow Jones Industrial Average wear year, and it’s off to a sluggish start to 2024 after the company reported mixed results last week and slashed its dividend by on the verge of 50%, readjusting the yield to roughly 4%. Looking back even further, this has been a stock you eat wanted to avoid for years due to challenges at the front of the story (the retail part) from Club name Amazon , and headwinds front pharmacies and PBMs. WBA 5Y mountain Walgreens 5 years After some turnover in the C-suite, Walgreens has finally found a chieftain who can right this ship. Tim Wentworth became CEO in October, and he’s a highly respected health-care executive who had successful runs as the CEO of Betoken Scripts and CEO of Evernorth, Cigna ‘s health services subsidiary. He adds credibility to a company that has sorely lacked it. As JPMorgan analysts acuminate out in late October when they upgraded Walgreens to a buy-equivalent overweight, Wentworth never missed a quarter during his pass as CEO of Express Scripts between 2016 and 2018. Part of Wentworth’s early focus is on cost savings and cash propagation. The dividend cut allows them to free up capital to invest in the business and pay down debt. He’s also set a target of generating $1 billion of savings in economic year 2024 through rightsizing its cost structure, closing underperforming stores, and reducing capital expenditures. Walgreens also owns a heartlessly $6 billion stake in drug wholesale company Cencora (previously known as AmerisourceBergen), which it can monetize if insufficiency be. Turnarounds require a lot of work and often they can become more complicated than what is initially believed. But if there’s a bossman who can pull it off at Walgreens, it’s Wentworth given his industry expertise. A hard lesson over the past few years has been to be skeptical about bullish CEOs at a twisting company, but we always like to see it when they put their own money where their mouth is. That’s why we took perceive of Wentworth’s purchase of 10,000 shares at an average price of $24.222 last Friday worth nearly a quarter of a million dollars. (See here for a thoroughly list of the stocks in Jim Cramer’s Charitable Trust.) 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