As investors face volatile markets and geopolitical tensions, Alexandra Lee at US-based Sustainable Growth Advisers discussed her top stock pick at the third annual London Quality-Growth Investor Conference this week.

Alexandra Lee at Sustainable Growth Advisers singled out Danish pharmaceutical company Novo Nordisk, which excels in diabetes care and the fight against obesity, as her top stock pick at the London Quality-Growth Investor Conference this week.

Sustainable Growth Advisers invests in firms that offer sustainable growth stocks over the long-term to take advantage of short-term inefficiencies and volatility.

Highlighting the benefits of this approach, Lee (pictured) said she first invested in Novo Nordisk in 2010 when it was a leader in injectable diabetes drugs, with a 24 per cent global diabetes market share. But in 2016, the firm faced difficulties and its profits dropped by 20 per cent, the biggest intraday decline since July 2002, after cutting the long-term average operating profit growth target as well as weak 2017 guidance.

Despite the fall, Lee held on to the stock, realising that the drug semaglutide was coming, which offered greater control over diabetes and weight loss. She believed the firm would start compounding again which happened.

The firm’s main product is semaglutide, used to treat diabetes under the band names Ozempic and Rybelsus, as well as obesity under the brand name Wegovy. Novo Nordisk, which has a 45 per cent share of the global insulin market, is also involved in hemostasis management, growth hormone therapy and hormone replacement therapy. It is now the largest pharmaceutical company in Denmark, with its market capitalisation exceeding the GDP of Denmark’s domestic economy in 2023. It is also the highest valued company in Europe.

Lee said that more than two million people out of the 800 million people with obesity have been treated, reducing the risk of a heart attack, a stroke, chronic kidney disease and diabetes. She believes that Novo Nordisk is in a leading position in the obesity, diabetes and rare disease markets, estimating that it will show double-digit growth.

Mike Owens, senior sales trader at Saxo UK, a licensed subsidiary of fintech specialist Saxo, also highlighted the increase seen in Novo Nordisk trading. “Novo Nordisk is one of the most widely held companies among Saxo Bank investors. Its popularity isn’t just with domestic Danish traders but attracts interest from Saxo’s entire global client base,” Owens said. “Saxo investors used the recent pullback in the share price to add to its existing position with overall net holders increasing by around 2 per cent in the past week.”