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Investing Specialists

Novo Nordisk Has One of the Widest Moats in Health Care

Morningstar StockInvestor editor Matt Coffina explains why he recently purchased Novo Nordisk for StockInvestor's real-money Hare portfolio.

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I have a soft spot for companies with the combination of a wide economic moat (a very strong competitive advantage), a positive moat trend (the competitive position is improving over time), and exemplary stewardship (management that excels at strategic execution and capital allocation).  Novo Nordisk (NVO) is just such a company, and I recently purchased it for Morningstar StockInvestor's real-money Hare portfolio. I think Novo Nordisk has one of the widest moats in healthcare, with many favorable dynamics beyond just patent protection defending the firm's profits from the competition.

The World's Premier Diabetes Drugmaker
With more than 85 years of history and about a 50% share of the global insulin market by volume, Novo Nordisk is the leader of the attractive diabetes drug niche. Prevalence of the disease has been steadily increasing, with aging populations, unhealthy diets, and increasingly sedentary lifestyles. None of these secular trends shows any sign of slowing. The total market for diabetes care grew 10% annually over the past decade, and Novo Nordisk has been steadily improving its market share.

Matthew Coffina has a position in the following securities mentioned above: NVO. Find out about Morningstar’s editorial policies.