first_img Kirsteen Mackay | Monday, 10th August, 2020 | More on: HIK FTSE 100 pharma star: can the Hikma share price climb higher? Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! See all posts by Kirsteen Mackay Image source: Getty Images. “This Stock Could Be Like Buying Amazon in 1997” Our 6 ‘Best Buys Now’ Sharescenter_img Hikma Pharmaceuticals (LSE:HIK) is enjoying a positive year thanks to the success of its global injectables business, which includes chemotherapy treatments and muscle relaxants. On Friday it reported revenue for the injectables business grew 13% to $485m. It also revealed a pre-tax profit of $274m for the first six months of the year, which is a 21% rise compared with the equivalent period in 2019. In response, it announced a dividend hike to distribute its good fortune among shareholders. As a result, the Hikma share price enjoyed an 11% rise on Friday but remains down nearly 10% from its May high.Profitability in genericsThe FTSE 100 company makes almost 700 high-quality, affordable drugs for customers around the world. Some of these are branded and many are generic.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Hikma is a contract manufacturer for US drug giant Gilead and has begun manufacturing Remdesivir on behalf of the firm. Remdesivir is an anti-viral drug, approved to treat Covid-19, which has gained wide media coverage and much speculation since the Trump administration hyped its effectiveness.Hikma’s earnings per share are £1.52 and results for the first half of the year were strong. Revenue was up 8% and operating profit rose 15%, both ahead of the board’s expectations. Delivering positive results to shareholders on the back of conservative predictions seems to me to be a responsible way to run a business, rather than getting shareholder hopes up, only to possibly dash them.It has improved profitability in its generics division, which has served it well in recent years. However, it faces an increasing challenge as pressure on pricing in the US retail generics sector increases. The US accounts for 62% of its business and Hikma operates in a competitive and highly regulated industry.Risk and valueHikma has a varied geographic presence, which on one hand gives it diversified scope for growth, and on the other creates risk in certain regions. For instance, there is political instability in the Middle East and North Africa, which could pose a challenge to efficient distribution. Meanwhile, the US is facing many problems amid the coronavirus pandemic.With a £5bn market cap and price-to-earnings ratio (P/E) of 15, I think Hikma still offers shareholder value though. There are many pharma stocks trading on far higher ratios. Abcam for example, with a market cap of £2.7bn has a P/E of 58 and Bioventix with a market cap of £221m has a P/E of 37. AstraZeneca with its £111bn market cap has an astronomical P/E of 108!Is the Hikma share price a good investment?I think the Hikma share price could have further to climb. Pharmaceuticals are hot stocks this year, particularly those involved with helping combat coronavirus. However, rises may be slow and we should expect volatility along the way. Hikma’s share price has climbed 67% in the past three years and is now around a level it previously enjoyed five years ago. I think Hikma is a good investment to add to a diversified portfolio. Kirsteen has no position in any of the shares mentioned. The Motley Fool UK has recommended Hikma Pharmaceuticals. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Enter Your Email Address I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Simply click below to discover how you can take advantage of this. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.last_img

Published by admin

Leave a Reply

Your email address will not be published. Required fields are marked *