SHOULD YOU BUY SHARES IN Glaxo Smith Kline??
Due to the recent global issue the economy has been halted and the stock market has took a major hammering!
Is this the end of the world? Or is this the greatest time to invest in the stock Market?
WATCH THE FULL VIDEO BELOW!
WHAT DO GSK DO?
Glaxosmithkline is a pharmaceuticals giant based in the U.K and is part of the FTSE 100 index. GSK’s share prices have recently plummented along with the rest of the stock market so this could be a great opportunity to get your foot in the door on a safe investment, this is ideal if you are a more risk adverse investor.
As defensive shares such as food, drinks and Pharmaceuticals are ideal to balance your portfolio as people will always need these items even if there is a recession.
The business model of GSK is relatively simple for an industry which is constantly innovating & can be quite complicated.
As a science-led global healthcare company it researches and develops a wide range of innovative products in areas of Vaccines, Pharmaceuticals and Consumer Healthcare to commercialize them in more than 150 countries around the world.
GSK even developed the first Malaria vaccine and also holds intellectual property on many medicines.
GlaxosmithKline also has a reliable dividend yield of 5%.
It’s share price has plummeted recently and although a P/E ratio of 18 is not as cheap as other riskier investment sectors, consistent sales revenue & profits over the past several years is a great sign!
So could this be the perfect time to add this Pharmaceuticals giant to your portfolio??
In this video we are going to find out, I’m going to do a full stock analysis into GSK and detail whether I think it is a good investment and tell you whether I PERSONALLY have invested in them or not.
LETS DIVE IN!
GSK Business Strategy?
GSK stands out in the pharmaceutical community and got heavy criticism from the investors, due to their new strategy to focus on selling “low price-large volume” drugs in emerging markets instead of most common practice of selling “high price-low volume” products in the US and Europe .
In an industry where cutting edge biotech start-ups get lots of attention and many pharmaceutical companies are re-designing their R&D operations to catch-up with new & even more complicated levels of innovation,
GSK is decided to keep things simple!
GSK Chief Executive Sir Andrew Witty chose to swim against the tide by defining his vision as “A simpler, stronger and more balanced platform for long-term growth”
A major pillar of this new business strategy was simplifying the three components of the operating model in alignment with the new vision. (SCREENSHOT OPERATING MODEL)
Recent Epidemic?
In terms of battling the recent epidemic Glaxosmithkline has joined with French giant Sanofi to work together and try & develop a coronavirus vaccine.
Now It’s very risky to investment purely in a company with the expectation that it may one day develop a vaccine for the latest virus. Now you may be right & make a lot of money or you may be wrong. But To me that is not investing that is SPECULATION.
However, in GSK’s case the business is established, proftiable & reputable so even if they don’t create the vaccine, it’s no major issue, it would just be a nice BONUS if they did.
As GSK also produce many other corona virus related products including pain killers, vitamins, supplements and of course testing kits.
DEEP DIVING INTO THE STOCK! (Screen capture video )
- Trading at 67.4% below its fair value
- Revenue is forecast to grow 3.54% per year
- Earnings grew by 64.8% over the past year
FINAL THOUGHTS?
Overall, GSK is the ideal Pharmaceutical business to balance your stock portfolio during recessionary periods.
With past earnings growth of 28% , a reliable 5% dividend and trading at 41% below value.
GSK offers a margin of safety for your investment which should help to offset the risky short term debt.
I did purchase shares in GSK, to give me some exposure to the Pharmaceutical industry through an established company.
