GSK.UK Stock
00.00 | Instrument:GSK.UK |
Headquartered in London, UK, the GlaxoSmithKline Plc (GSK) is a leading healthcare company that traces its roots way back to the 18th century. However, modern-day GSK was founded in 2000 following the merger of Glaxo Wellcome and SmithKline Beecham. The company describes itself as a science-led healthcare company that helps people to ‘do more, feel better, and live longer.’ GSK researches, develops and sells injections, inhalers, tablets, ointments, liquids, and sterile products in 3 main categories that also serve as its business segments: Pharmaceuticals, Vaccines, and Consumer Healthcare.
GSK has a broad portfolio of well-known and highly successful brands in all the 3 business categories that it operates in. Some of its best-selling vaccine and pharmaceutical brands include Ventolin, Advair, Breo Ellipta, Avodart, Augmentin, Tivicay, Triumeq, Lamictal, and Boostrix. In particular, HIV and respiratory brands have been the top money-making products for GSK. The company also has an impressive portfolio of consumer healthcare products that include Panadol, Boost, Coldrex, Biotene, ENO, Nicorette, Sensodyne, Parodontax, and Odol.
GSK’s wide portfolio is a testament to the culture of innovation within the company. The company is one of the biggest spenders in research and development, and this has continually supported the success of its existing products as well as those in the pipeline. But a product of a merger itself, GSK has also sought to pursue strategic growth by being an active player in the M&A pool. Some of the biggest acquisitions for the company include Human Genome Sciences, TESARO, and Okairos. Its biggest divestitures include the sale of Lucozade and Ribena. The company has also in recent years been keen to split its consumer healthcare business so as to unlock its true potential in the equities market.
GlaxoSmithKline Plc is listed on the LSE where it trades under the ticker symbol GSK (LSE: GSK). The GSK stock is a component of the FTSE 100. The company also has a cross-listing on the NYSE where it trades under the ticker GSK.
GSK Stock History
GSK stock is quoted in GBX (British pence) on the LSE. The company has never implemented any stock split in its history since the 2000 merger.
After the merger, the GlaxoSmithKline plc share price traded at around 1700p. It drifted slightly upwards to above 2000p by November 2000 but failed to sustain above that psychological price level. The GSK price then started edging lower in mid-2001, and by February 2003, GSK shares traded around 1100p. It would pick up upward momentum in mid-2004 and climbed to above 1500p by the end of 2005. A period of consolidation then followed, but it was overextended by the effects of the 2008 Great Recession and GSK shares fell to circa 1000p. The stock again started ticking higher in early 2009, and by May 2013, it had climbed to above 1700p. In 2020, the stock had climbed above 1800p, but the Great Lockdown triggered a sharp fall to around 1200p. The stock has since recovered and continues to trade above 1600p as of February 2022.
GSK operates a lucrative business that has allowed it to guarantee stable and consistent GlaxoSmithKline dividends per share to its shareholders. The company has been a generous dividend payer, with yields averaging over 4.5% in recent years.
How to Trade GlaxoSmithKline Stock
Here are some of the factors to consider when trading the GSK stock:
- Regulatory and Legislative issues
GSK operates in a sensitive industry that is characterized by close regulatory scrutiny. The bottom-line of the company can be influenced by factors such as approvals, environmental impact, patents and rights protection (generic products), as well as drug pricing controls. GSK sells its products worldwide, and this means that the company has to navigate regulatory and legislative issues in different jurisdictions.
- New Product Rollout
As a science-led company, GSK spends huge resources on constant research and development. The company currently has over 40 products in the pipeline, with 10 of those capable of hitting the coveted $1 billion mark in annual revenues. Hit products are capable of significantly boosting the company’s bottom line. On the flipside, miss-products can hurt the company considering the number of resources that will have been expended in the entire development process.
- Negative PR and Lawsuits
As a player in the delicate health space, GSK is exposed to negative PR and potential lawsuits. For instance, the company has already been involved in controversial lawsuits in Australia, the UK, and the US that have ended up in hefty fines. Negative headlines are a major headwind for many stocks, especially healthcare stocks such as GSK where there is additional sensitivity because human life is involved.
- Periodic Earnings
The GSK fiscal year runs from January 1st to December 31st. The company releases periodic earnings reports which update investors on their business health and performance. Strong numbers, as well as a positive future outlook, can inspire higher stock prices, whereas weak figures and negative outlook can trigger selloffs of the GSK stock.
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