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lse:gsk

#1

Well it didn’t take long, although the FED rate hike is probably as responsible.
Should have sold my daughter’s holding yesterday – oh well.

I wonder what Woody is thinking, as he watches his 3 funds shrink by the day with the ongoing redemptions.

Games


#2

Good dividend this week. Worth investing in this company for the long term


#3

Not sure about that, with mounting debt, over paying for companies with no guarantee of a secure return. Offloading cash cows to invest in R&D with limited compound success rates.

The company has already stated that it will not support the current dividend in a guaranteed form as was the case up to the end of 2018. The new dividend policy links the dividend to cash flow, where as historically the dividend was maintained even when uncovered by cash.

There are far better places for your cash IMHO

Games


#4

Lawson 76,
I have just bought into GSK basically 1 I had no holding in pharm companies &
2, The proposed joint venture with the American pharm giant, into a separate holding company looks as if it should help lift the Company.


#5

I look at it differently. GSK - 6th best FTSE 100 performer in 2018. 19.04% total return. Long may the returns continue.


#6

Doug - watch out for Tesaro


#7

Well, I believe they have “guaranteed” the divi for 2019 too - but yes, beyond that, it will have to be earned rather than entitled. Nothing wrong with that, 'tis the way it should be, and a divi policy linked to FCF makes much more long-term sense than any earnings basis.

Around £15, I agree, there probably are quite a few better places for your cash - though that it is more of a reflection of the ever-larger number of compelling long-term opportunities out there, whatever the near-term overhang.

And… not a few WORSE places for your cash, too. I remain a happy holder - whither goest the dividend!


#8

Nice one there William, always good to have courage of conviction. :slight_smile:

Regards Games


#9

So @Gamesinvestor1 , did you sell your daughter’s GSK shares yet? If you follow your own bearish analysis you should have done by now. So tempting just to wait for that next divvi though, isn’t it? So tempting to hold a solid defensive with all the political mess around?


#10

Yep – Put it all into Joules Doug - so far so good.

Games


#11

Hope they do better than SuperDry for you. Ouch! My teenage spies say Boohoo is “sick” these days. I’m in deep there. I’ll be dumping GSK soon but waiting for 1580/ 1600.


#12

Hi Doug,

I would be cautious about dumping GSK. As an internally trading company it is a good hedge against Brexit woes. Other than having to run fast to maintain its pipeline of new drugs, there are no great risks and it is not going outbof business anytimesoon. A reliable provider of dividends and, in my view, a keeper.

Cheers,

Frog


#13

Good luck guys, I’m sure you’ll do fine, but for me the decision is to look for more growth, and profitable growth, and maybe GSK can return to it, but the picture doesn’t quite ring for me.

I can’t complain, I’ve never lost money holding GSK, I just don’t think it has that great a future - that’s all really.

In the stock market, one has to make judgements, some turn out well, others don’t – only time will tell – neither decision to sell GSK or buy Joules or others has anything to do with Brexit – and nor should it really.

Games


#14

Doug - nice one – I made a great return out of Superdry back in it’s Dunkerton days and made a modest reentry which is now underwater – I didn’t think the results were that bad the other day - Dunkerton may yet get his wish, as I consider the issue more of management rather than the tainting of the brand.
Not in BooHoo or ASOS to be honest – the margins on the latter seem to have been cut and cut and cut – great concept though when it was launched as ““As Seen On Screen””

Games


#15

I agree with everyone. GSK is a long term holder and keeper for what at times are welcome dividend returns, but don’t nail yourself to forever, it all depends on the price.

In the last 12 month (just !) there have been opportunities to buy at £13 and sell at £16, both gleefully taken, while retaining a core. When the opportunities arise in future to trade the price cycle, whether on core performance or moving exchange rates, take them.


#16

I agree, GSK is one for the long time. Buy on the dips and enjoy the dividends for years to come.

The purchase of TESARO for £4.0 bn was expensive, lets hope they can make it work.

GLA


#17

I think MT has it about right - indeed, on a much longer term view, the evidence is you buy around £13 and sell around £17. I managed to get in a tad below £13 not so long ago, and increasingly I see that end of the range as well-underpinned, given the strong growth in FCF just reported for FY2018, which now comfortably covers the dividend (even on my own calculation of FCF, which gives a slightly lower figure than GSK’s)… for the first time in years.

But equally, Games is not wrong really - hard to see sustainable growth which would justify any kind of sustained push beyond the other end of the range.


#18

…and also on a long term view whilst the dividends keep rolling in.
“GSK plans that within 3 years it will demerge and float the consumer health business, splitting GSK into two distinct businesses: one focused on consumer, the other on pharmaceuticals and vaccines.”