Tuesday 30 May 2017 The one stop source for free breaking news, expert analysis, and videos on AIM and LSE listed shares


This Small Pharma is Expanding into the US and Asia- A Wise Move if We Quit Europe.

By Malcolm Stacey | Saturday 5 March 2016


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


Hello Share Trekkies. The health game is a good place to be for winning share seekers like us in 2016. Bio-science firms are set to reap the benefit of an ageing world population with all its attendant health problems. And even younger folk will sadly require more medical care, unless they can do something about their unhealthy diets.

Health firms also have a defensive quality. The last thing people will do without when times get hard, is their treatments and medication. I’ve brought a few likely small pharma firms to your attention over the last six months. And here’s another one: Alliance Pharma (APH).

It’s an AIM company, but don’t let that put you off. One of its main strategies is to buy up other promising set-ups in a similar line. For example, it gobbled up Sinclair IS Pharma’s dermatology arm. The cost was £132 million and some in the City say it was well worth it.

The company has also recently entered the US and Asia markets, where medical services are adequately funded, unlike many bits of the NHS. It already has a strong profile in Europe, and I suppose it's wise to expand in other continents, expceilly if Britain leaves the EU.

The PE Ratio is a manageable 15 and it pays a dividend with the yield just short of 2%. Any regular pay-out is fairly rare for a smallish bio pharmaceutical venture and is an indication of reliability. Pre-tax profits are not growing year by year, but, and this is fairly unusual for medical people, it never makes a loss. While its recent expansion policy makes me think that the firm's money-making capabilities will grow this year.

It has an annual turnover of £40 million a year. The share price dipped to 42p in January and is around 48p now. The share price was 61p last summer without the expansion news that’s come in since then. So I see no good reason why the shares shouldn’t bust through the 60p level again.

And I see no reason why I shouldn’t now visit the Punter’s Return. God bless.


Filed under:


Never miss a story.




This area of the ShareProphets.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ShareProphets.com. ShareProphets.com does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ShareProphets.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ShareProphets.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.


More on APH


Comments


Enter your comment below. Fields marked * are required. You must preview your comment first before finally posting.




Site by Everywhen