Gsk Share Discussion Threads

[gateside] 12/10/2006 19:47

From yesterday's Independent

One of the major market disappointments over the past five years or so has been GlaxoSmithKline. Formed by the merger of Glaxo Wellcome and SmithKline Beecham in 2000, the shares have consistently underperformed the market and still stand at a substantial discount to their pre-merger combined value. The word in the market is that the company could be considering another mega-merger to create some value for shareholders, this time with the Swiss rival Novartis.

Traders said recent strong newsflow, such as the $566m (£305m) acquisition of CNS and the FDA approval of its influenza vaccine in the US, has put the group in a stronger bargaining position than it has been in for some time. One trader said: "GSK might be an integral part of UK plc but if it wants to keep up with its global competitors it should be thinking about a blockbuster deal."

[whatwoman] 12/10/2006 19:00

Briansnape. As it happens aldasoa is making a very good and correct observation. However, it doesn't really help you to alleviate your worry.

You obviously want to invest in the markets for good long term growth, and it is always good to have a wide variety of shares in your portfolio, representing different sectors. Glaxo like other quality shares should be held for the long term, always making sure you do not buy at their highs.

To answer your question re: buybacks. The company is producing a lot of cash. Some it invests in research and development, some in buying other companies, some to pay the salaries and huge bonuses, etc, etc.
Even after all this it has cash, so it decides to invest in itself. By buying up its own shares and cancelling them, Glaxo has fewer shares in the market, which means that its earnings per share goes up and its p/e goes down. This often impresses the investors, and it also shows confidence in their own business, as long as they do not overdo it. If the shares are not cancelled the company can if they want to collect the dividends and use those shares for acquisitions without issuing new shares which also impresses investors.
In Glaxo's case I do not think they are doing it to keep the share price higher.

Anyway that is my opinion, believe it or parts of it or not at all. It doesn't really matter.

Aldasoa is correct in that bulletin boards just like any other source of advise or even professional advisors must all be looked at for information. You must decide for yourself at the end.

All the best and I sincerely hope it helps in a small way.

[aldasoa] 12/10/2006 10:02

Brian, if you need and trust advice from a bulletin board, I suggest that you sell all your shares and put your cash into a building society.

[briansnape] 11/10/2006 09:22

There seems to be large quantities of shares being bought back and placed in treasury, is this a good thing showing directors confidence in the stock, or perhaps directors authorising buyback to keep up the share price, failing a bit recently.

Should I stick with it and hope or dump it and buy something less volatile.

Who knows, I do not.

Brian

[gateside] 10/10/2006 06:09

GSK breathes life into nasal strip maker with $566m buy

By Stephen Foley
Published: 10 October 2006

GlaxoSmithKline is paying $566m (£303m) to acquire the manufacturer of a stick-on nasal strip that helps snorers and athletes breathe more easily.

The pharmaceuticals giant is adding Breathe Right to its portfolio of consumer medicines that includes Panadol headache pills, Tums indigestion tablets and Nicorette anti-smoking patches.

The Breathe Right brand, which covers nasal strips to open up the nostrils and throat sprays to prevent snoring, was developed by CNS, a Minneapolis company which was looking for a bigger company to push the products outside the US. After an auction of the business, GSK agreed to pay $37.50 a share for CNS.

The company has been selling Breathe Right strips since 1993 and the following year a running-back for the Philadelphia Eagles wore a nasal strip during a televised American football game - and the strips gained popularity throughout the professional game.

Other CNS products include the Fiber Choice range of dietary supplements, which have yet to be launched outside the US. Breathe Right sales have been growing at 12 per cent a year, and Fiber Choice is growing at 54 per cent a year.

Marti Morfitt, the chief executive of CNS, said: "I am proud of our achievements at CNS and the success we have built around our brands, and am happy our good work will continue with GSK as these brands realise their worldwide potential."

GSK has been trying to bulk up its consumer healthcare arm - which had sales of £1.6bn in the first half of the year, compared to £10.1bn for the main prescription medicines division. Earlier this year it lost out in the $16.6bn auction of Pfizer's over-the-counter medicines division, while last year the consumer products division of Boots was sold to Reckitt Benckiser for almost £2bn.

[gateside] 09/10/2006 07:48

Company Website:

[cannoncan] 27/9/2006 18:51

check out ERX, news on Colonical cancer coming very soon, positive news, check out there recent news on breast cancer.. very big news that one.

[spob] 27/9/2006 05:23

2 month






1 Year