Showing posts with label GSK. Show all posts
Showing posts with label GSK. Show all posts

Thursday 5 July 2012

A UK Blue-Chip Starter Portfolio


Company
Industry
Share Price (Pence)
P/E
Yield (%)
HSBCFinancials5619.05.2
Royal Dutch ShellOil & Gas2,2257.65.0
BHP Billiton (LSE: BLT.L  )Basic Materials1,8067.64.3
British American TobaccoConsumer Goods3,24214.64.5
Tesco (LSE: TSCO.L  )Consumer Services3108.85.0
GlaxoSmithKlineHealth Care1,44711.45.3
Vodafone (LSE: VOD.L  )Telecommunications17910.97.4
Rolls-RoyceIndustrials85814.22.4
National GridUtilities67612.46.1
ARM HoldingsTechnology50632.20.9

Excluding tech share ARM, the companies have an average P/E of 10.7 and an average yield of 5.0%. The numbers were 9.8 and 5.2%, respectively, when I last carried out this exercise in October 2011.
So, the group is rated a bit more highly today than it was nine months ago. However, I think it still veers towards the value end of the spectrum, because my rule of thumb for this group of nine is that an average P/E below 10 is firmly in "good value" territory, while a P/E above 14 starts to move toward expensive.


Wednesday 4 July 2012

5 Stocks With Staying Power

By Motley Fool Staff July 3, 2012

Some press comments I read over the weekend suggested -- gasp! -- that readers ought to think about putting money in the stock market. Over the long term, ran the logic, the market looked set to outperform bank accounts, mattresses, gilts, and property.
Such sentiments aren't novel, of course. Just the other day, I pointed out three reasons to buy into the market today. But such a stance does pose an obvious question, especially for the novice investor.
Namely, which shares offer long-term staying power?
Go the distanceSo here, I offer up five stocks for the long haul: five decent businesses, with decent Warren Buffett-style "moats," decent histories of long-term dividend growth -- and very reasonable prices.
Better still, they're all large-cap companies, thereby offering robustness and resilience against the inevitable uncertainties that lie in the future. Three, in fact, are in the top 10 FTSE 100 stocks -- and all five of them make the top 20.
And I make no apology for another feature that they all share: a high exposure to consumer non-discretionary expenditure. With the consumer contributing about 65% to GDP, stocks reliant on captive consumer expenditure provide a good buffer of insurance against the business cycle.
But before diving into the financials, let's start with a quick "pen picture" of each company.
Five for the futureFirst up is GlaxoSmithKline (LSE: GSK.L  ) , which employs around 97,000 people in more than 100 countries. Every minute, apparently, more than 1,100 prescriptions are written for GlaxoSmithKline pharmaceutical products. Almost as attractive is its strong range of consumer-friendly brands: Ribena, Horlicks, Lucozade, Aquafresh, Sensodyne, and the Macleans range of toothpaste, mouthwash and toothbrushes.
Next comes Vodafone (LSE: VOD.L  ) , the world's second‑largest mobile telecommunications company measured by both subscribers and 2011 revenues, which has 390 million customers, employs more than 83,000 people, and operates in more than 30 countries across five continents.
Third comes British American Tobacco (LSE: BATS.L  ) , the world's second-largest quoted tobacco group by global market share, possessing 200 brands sold in around 180markets, and with 46 cigarette factories in 39 countries manufacturing the cigarettes chosen by one in eight of the world's 1 billion adult smokers.
Fourth, we have Unilever (LSE: ULVR.L  ) , which employs 167,000 people, sells its products in 180 countries, and has a clutch of best-selling brands as diverse as Flora, Dove, PG Tips, Marmite, Persil, Knorr, Ben & Jerry's and Colman's.
Lastly, consider 500,000-employee Tesco (LSE: TSCO.L  ) , which is the world's third-largest international retailer, with fully a third of its sales coming from overseas, and spread over 13 countries. Throw in innovative home shopping, finance, and telecommunications offerings, and Tesco is more than just another grocer.
Let's see the numbersThose are the five businesses. Each, clearly, is large and diversified, with a solid consumer-centric go-to-market proposition.
But how do the finances stack up? Let's take a look. The table gives the lowdown.
Company
Share Price (Pence)
Market Cap (Pounds)
Forecasted P/E
Forecasted Yield
GlaxoSmithKline1,45873.7 billion11.95.1%
Vodafone17887.7 billion117.2%
British American Tobacco3,26563.8 billion15.54.2%
Unilever2,14860.6 billion16.43.7%
Tesco31325.1 billion8.94.9%
Now, it's fair to say that not all of these shares tick the usual "screamingly cheap" boxes. All but one is rated at above the FTSE 100's average price-to-earnings ratio, for instance -- although generally not hugely above it. That said, all but one offers yields that are above the FTSE 100's average.
But in any case, for the most part these aren't shares selected because adversity has temporarily driven down their prices: These are shares chosen to be solid picks over the long term.
In short, they're buy-and-forget shares that will deliver a decent total return stretching into the future. And on that basis, it's a matter of "price is what you pay, staying power is what you get."\

Saturday 23 June 2012

Investor's Checklist: Health Care


Developing drugs is time-consuming, costly, and there are no guarantees of success.  Look for companies with long patent lives and full pipelines to spread the development risk.

Drug companies whose products target large patient populations or significant unmet needs have a better chance of paying off.

Make sure you have a big margin of safety for pharmaceutical companies with mega blockbuster drugs that make up a large percentage of sales.  Any unexpected development can send cash flow, and the stock price, reeling.

Unless you have a deep understanding of the technology, don't invest in biotech startups.  Payoffs could be large, but the cash flows are so far out and uncertain that it's easier to lose your shirt than win big.

Don't overlook the medical device industry, which is full of firms with wide economic moats.

Cash is king for firms that rely on development (pharmaceuticals, biotechnology, and medical devices).  Make sure firms have enough cash or cash from operations to get through the next development cycle.

Keep an eye on the government.  Any drastic changes in Medicare/Medicaid spending or regulatory requirements can have a deep impact on pricing throughout the sector.

Managed care organizations that spread risk - whether through a high mix of fee-based business, product diversification, strong underwriting, or minimal government accounts - will provide more sustainable returns.  


Ref:  The Five Rules for Successful Stock Investing by Pat Dorsey


Read also:
Investor's Checklist: A Guided Tour of the Market...

Wednesday 27 October 2010

Questor share tip: GlaxoSmithKline has potential for growth

Last week's third-quarter numbers from pharma giant GlaxoSmithKline (GSK) demonstrated progress on its core strategy. This was welcome news.


GlaxoSmithKline
GlaxoSmithKline
£12.80½
Questor says BUY
The company has been suffering from patent expiries on some of its major products – but is refocusing its business away from "white pills/Western markets" to a more consumer-orientated and emerging market focused group.
The headline numbers suffered from generic competition to herpes treatment Valtrex in the US and the withdrawal of diabetes treatment Avandia from some markets.
Last year's figures were also boosted by one-off sales of influenza pandemic vaccines.
This meant third-quarter pre-tax profits were lower than last year – at £1.97bn, compared with £2.07bn, on revenues that rose 0.8pc to £6.8bn. These numbers were ahead of expectations.
However, when the effect of Valtrex, Avandia and flu are stripped out, revenue growth was about 6pc. This is significant, as it represents the core of the company's business in the future.
GSK remains a dividend play, with the shares yielding 4.7pc. The group raised its interim payment to 16p from 15p last year – it will be paid on January 6 next year and the shares trade ex-dividend for this payment on October 27.
The shares were recommended as a dividend play on October 29 last year at £12.51 and they are now 2pc higher than that level compared with a market up 12pc. Trading on a December 2010 earnings multiple of 11.6 times, falling to 10.4 next year, the shares are a solid yield play with growth potential

http://www.telegraph.co.uk/finance/markets/questor/8082032/Questor-share-tip-GlaxoSmithKline-has-potential-for-growth.html

Monday 27 April 2009

Swine flu: the UK shares affected

Swine flu: the UK shares affected

The outbreak of swine flu, which has killed more than 100 people in Mexico and spread to the US, Canada and New Zealand, has hit UK shares linked to travel and agriculture, and give a boost to pharmaceuticals companies. Some of the biggest companies affected are listed below.

By Amy Wilson
Last Updated: 10:26AM BST 27 Apr 2009
GlaxoSmithKline
Shire
British Airways
Easyjet
Thomas Cook Group
TUI Travel
Carnival
InterContinental Hotels Group
Cranswick
Genus


Pharmaceuticals

GlaxoSmithKline: its shares rose as much as 44p, or 4.4pc to 1,050p. Glaxo makes a flu drug called Relenza, which could be bought up by governments seeking to treat and halt the spread of swine flu. Relenza has been shown to work against viral samples of the disease.

Roche: The shares rose in Swiss trading. Roche's Tamiflu drug can reduce the symptoms of swine flu and said it has an ample supply of the drug as the outbreak spread outside Mexico.

Shire: the drugs company’s shares rose in sympathy with Glaxo's.

Airlines:

British Airways: The airline has been hit along with others in the sector, on fear the swine flu outbreak will reduce demand for travel.

easyJet: The low-cost airline fell.

Ryanair: the Irish budget airline was also under pressure.

Travel companies:

Thomas Cook: The holiday company fell on concern the spread of swine fever will curb foreign travel. Mexico has been a popular destination for holidaymakers trying to avoid countries using the euro while it remains so strong against the pound.

TUI Travel: The Thomson holiday group also declined.

Carnival: the cruise operator, whose Caribben cruises take in Mexico, dropped.

Intercontinental: Shares in the hotel operator also fell.

Agriculture:

Cranswick: The food firm, which has just bought a Norfolk-based supplier of pork for Tesco and a number of other major retailers, fell on concern shoppers will avoid pork products as a result of swine flu.

Genus: The pig breeding specialist declined.