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Share Centre share of the week: Hikma Pharmaceuticals

Joanna Faith
Written By:
Joanna Faith
Posted:
Updated:
06/07/2015

Helal Miah, investment research analyst at The Share Centre, picks Hikma Pharmaceuticals as share of the week.

“As both the newest and smallest pharmaceutical company in the FTSE 100 our share of the week this week is Middle Eastern pharmaceuticals company, Hikma Pharmaceuticals.  The company is very distinct from its larger rivals in that it focuses on both branded and unbranded generic drugs. Investors should know that its sales exposure is geared towards the Middle East and North African markets. 2015 has so far gone well for the group and management expect revenue growth of 2% and an operating margin of 35%.

“Stakeholders should be aware that the shares trade on a price to earnings multiple of 22x, in-line with other generic manufacturers and has a modest dividend yield of 1%. The company’s target markets are expected to be fast-growing for pharmaceutical and healthcare products, whilst its acquisition of Bedford and Ben Venue assets gave it a large foothold in the US market, which performed very well in 2014. Integration into this market is progressing well, which we believe strengthens the group’s offering.

“Due to Hikma’s seemingly bright future, we are initiating our coverage on this stock with a ‘buy’ rating for investors seeking capital growth and willing to accept a medium to higher level of risk.”

 

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