Eli Lilly and Co. (NYSE:LLY) — This leading producer of prescription drugs covers a wide range of treatments for neurological disorders, diabetes, cancer and many other diseases. It also provides animal health products.
For several years, the company struggled after losing patent protection for their many blockbuster drugs developed from 2000 to 2010, while having a thin stream of new products. Now, however, it is executing on its strategy to counter the loss of that protection by having the most numerous late-stage pipeline catalysts relative to its peers.
With a dividend yield of 3.8%, and earnings guidance from management that beat analysts’ estimates for 2013 and 2014, this stock offers a compelling valuation. Analysts are scrambling to increase their earnings estimates, and several major research departments have declared price targets north of $65.
The stock traded in the narrow range of $30 to $40 from 2009 to the middle of last year. This institutional favorite may look like it is approaching a formidable double-top, but momentum and volume should push it through $54 for a trade to $63.
Long-term investors may want to take a half position now and a full position on either a pullback or breakout. This stock has the potential for a major move even from the current price.