The market is trying to identify sectors which could potentially benefit from the post flood activities as the floods have affected 20 million people country wide and have caused massive damage. JS Global analysts assert that rehabilitating and providing medical facilities to victims is the government’s top priority.
Abbott performs well in first quarter
Abbott has performed commendably in its first quarter, posting an earnings growth of 72 per cent on a yearly basis to Rs185 million. It is anticipated that this momentum will continue after the floods due to the necessary provision of healthcare products to the victims.
Glaxo Smith Kline stock to perform
Glaxo Smith Kline is one of the stocks that could perform in the coming months. The company saw its revenues jump by 21 per cent on a yearly basis to Rs4.7 billion in the first quarter of 2010. Glaxo leads the industry in terms of value, volume and its prescription medicine market share; however its bottom line registered a decline of 9 per cent on a yearly basis to Rs360 million mainly due to higher marketing and administrative expenses.
Searle: Market cap Rs1.7b, free float 45%
The company managed to report profit after tax of Rs248 million, a growth of 15 per cent on a yearly basis in the nine months of the fiscal year of 2010. Higher sales during the period were the main reason behind growth in the bottom line. With a diversified product portfolio including anti-malarial and gastrointestinal medicines, the company is likely to experience a surge in volumes post this calamity.
Searle is currently trading at an annualized fiscal year 2011 price to earnings ratio of 5.1x, discount of 25 per cent to the market, compared to the historical average price to earnings discount of 22 per cent. The stock has witnessed decent activity in the recent past, recording average volumes of 41.3k shares traded during the last six months.
Published in The Express Tribune, August 18th, 2010.
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