Insulet stock (NASDAQ
NDAQ
: PODD) currently trades at $156 per share, about 29% lower than the level seen in early June 2022, just before the Fed started increasing rates, compared to 14% gains for the S&P 500 during this period. This underperformance can partly be attributed to investors’ concerns about the potential negative impact of new diabetes drugs on the sales of Insulet’s insulin pumps. The reduced risk of cardiovascular events for obesity drugs of Novo Nordisk and likely Eli Lilly may result in broader applications of obesity drugs weighing on insulin pumps demand used to manage diabetes.
Interestingly, Insulet stock has had a Sharpe Ratio of 0.7 since early 2017, higher than 0.6 for the S&P 500 Index over the same period. This compares with the Sharpe of 1.3 for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.
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