Insights for April 2016

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Big pharma seems to have been gripped by merger mania, starting from this month's botched merger between US giant Pfizer and Dublin-based Allergan. The value of mergers in the healthcare sector since 2014 amounted to more than $650 billion, accounting for 14% of global M&A activity worldwide. Now it's the turn of Astrazeneca (AZN:LN), which contends with GlaxoSmithKline the title of biggest British pharmaceutical company. The Cambridge-based healthcare conglomerate is reportedly considering a takeover of Medivation, a US-based drug manufacturer which specialises in cancer treatments. The offer is supposed to be around the £7 billion mark, and would bring Medivation's best-selling cancer cures within Astrazeneca's stable, at a time when its patent on key cancer drug Crestor is expected to expire. This would entail a loss of exclusivity to its formula, with is set to hit the company hard. Astrazeneca is not a company renowned for M&A, having shied away from market takeovers in the past, however lately it has been more active on that front. The Cambridge company has been already the object of merger speculation with Pfizer itself, and last year bought a 55% stake in Acerta Pharma, another pharma company specialising in oncology. Medivation, meanwhile, has recently rebuffed a hostile takeover bid from French company Sanofi. (Read more)

Other Insights on Related Shares: AZN.L
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Tesco PLC is a ‘Buy’ with a potential upside of up to 40% from the current price levels. The stock finished trading on London stock exchange on 20th April at 182 p a share. Post the announcement of fiscal 2016 results, the stock headed towards some correction as the stock has fallen by 10% post the fiscal 2016 financial results. However, any correction or a dip in stock can be an opportunity to buy for a value investor. In the terms of technical outlook, the stock has been trading below its 20 day and 50 day moving average of 190 p and 186 p respectively. However the stock has been trading above its 100 day moving average of 171 p. Therefore, the immediate support level for the stock is at 100 DMA i.e. 171 pence. We expect the stock to be range bound between 177p-200p in the coming quarters and months. Hence, the traders should watch these levels and trade with caution. Based on earnings estimates for the company's fiscal year ending in December 2017, the stock has a price-to-earnings ratio of 20.82 which is pretty high compared to FTSE100 12 month forward P/E of 13.37. Tesco Plc has a consensus rating of ‘hold’ and a consensus target price of 196 p.

(Read more)

Topics: Analysis
Other Insights on Related Shares: TSCO.L
Related Shares: Tesco Share Price
Posted by ShrutiAggarwal on 13 April 2016, 2:02 PM

Solo Oil, an interesting investment case

Solo Oil Plc (Solo) is a United Kingdom-based oil and gas investment company and has a market cap of £15.11m. The Company is principally engaged in the acquisition of a portfolio of direct and indirect interests in exploration, development and production oil and gas assets which are based in the Americas, Europe or Africa. Solo has a 25% interest in the Ruvuma petroleum sharing agreement (PSA) in the south-east of Tanzania. Solo holds a 6.5% interest in the Kiliwani North Development License (KNDL) on Songo Songo Island. Solo also holds a 10% interest in Horse Hill Developments Limited (HHDL), which is a 65% interest holder in two petroleum exploration and development licenses (PEDL), PEDL 137 and 246, in the northern Weald Basin between Gatwick Airport and London. Solo owns a 28.56% interest in 23,500 acres of petroleum leases in southern Ontario. Solo also holds a 15.9% interest in Burj Petroleum Africa Limited.

The company has traded in a wide range between 0.23p-0.80p over the last one year. Currently the company is trading at 18% above its 52 weeks low and 66% below its 52 weeks high. The company finished trading on London stock exchange at 0.272 p on 12th April. Currently, the company has also been trading below its 20 day, 50 day and 100 day moving average of 0.3089p, 0.3335p and 0.3134 respectively. (Read more)

Topics: Analysis
Other Insights on Related Shares: SOLO.L
Related Shares: Solo Oil Share Price

Wm Morrison Supermarkets PLC is a United Kingdom-based supermarket group and has a market cap of £4.73 bn. The Company is a fresh food manufacturer in the United Kingdom. The Company owns, operates and controls its fresh food supply chain. The Company's Market Street stores include butchers, fishmongers, bakery, cake shops, greengrocers, delis, oven fresh products, fresh to Go products, flower shops and cafes. The Company also offers clothing for children, baby and adults. The Company offers lifestyle products, such as Let's Grow products, entertainment products, such as games, films and television shows, the Morrisons magazine, dry cleaning services, petrol filling stations, pharmacies, facilities for shoppers with disabilities, photo printing services and recycling services. The Company markets its products under the Morrisons brand. The Company operates around seven regional distribution centers and one national center servicing its supermarkets, and three convenience distribution centers.

The company is a ‘Hold’ at the current price levels as lately stock has rallied quite a lot , so it might head for a correction soon. The stock has been trading above its 20 day, 50 day and 100 day moving average of 200p, 189p and 100 p respectively. The stock finished trading on the London stock exchange on 7th April at 202 pence a share. Though in the last 6 to 7 trading sessions, the stock has been trading range bound between 197 p to 202 p. Therefore, the stock has started consolidating at these price levels and any breakout above 202 pence indicates new highs and any breakdown below 195pence may indicate new lows for the stock in the near term. However, based on the fundamental analysis and the valuation, we dont see any upside in the stock from the current price levels. It would be discussed in the later part of the article. Currently the stock has been trading 46% above 52 weeks low and 4% below its 52 weeks high. Out of 18 analysts, 4 analysts have rated ‘Buy’, 4 analysts have rated ‘Sell’ and 10 have rated ‘Hold’ on the company. The stock has a consensus rating of Hold and a consensus target price of 180pence. According to the data from morning star, the stock has a forward P/E of 17.9 compared to FTSE100 forward P/E of 13.37.  The analysis of forward P/E of the company compared with FTSE 100 forward P/E clearly indicates that the stock is slightly overpriced. (Read more)

Topics: Analysis
Other Insights on Related Shares: MRW.L
Posted by ShrutiAggarwal on 2 April 2016, 6:55 AM

Fairly priced Tesco Plc

Tesco PLc is a ‘Hold’ and is fairly priced at the current price levels, as we don’t see much upside in the stock.  Tesco Plc has been trading in a range between 137p-252p over the past one year.  Based on earnings estimates for the company's fiscal year ending in March 2017, the stock has a price-to-earnings ratio of 21.6, according to Morningstar.com. This is slightly higher compared to FTSE 100 forward P/E of 13.3. The stock finished trading on London stock exchange at 190 p on 1st April 2016. In the terms of technical analysis, the stock has been trading above its 20 day, 50 day and 100 day moving average of 191p, 180p and 170p respectively. The stock has a strong resistance at 201 pence and immediate support is at 188 pence. However, the traders shall watch the support and resistance levels and hedge their positions accordingly.

Tesco PLC is a retail company and has a market cap of £15.8 b. The Company is engaged in the business of retailing and retail banking. The Company operates in four segments: UK, Asia, Europe and Tesco Bank. It has retailing and associated activities (retail) operations across the United Kingdom, Asia and Europe. It is engaged in the retail banking and insurance services through Tesco Bank in the United Kingdom (Bank). The Bank offers a range of personal banking products, which include mortgages, credit cards, personal loans and savings. The Company operates approximately 7,817 shops around the world. Its subsidiaries include Tesco Stores Limited, One Stop Stores Limited, Tesco Ireland Limited, Tesco-Global Stores Privately Held Co. Limited, Tesco Polska Sp. z o.o., Tesco Stores CR a.s., Tesco Stores SR a.s., Homeplus Co. Limited and Homeplus Tesco Co. Limited, among others. (Read more)

Topics: Analysis
Other Insights on Related Shares: TSCO.L
Related Shares: Tesco Share Price