Wednesday tips round-up: Smith & Nephew, AstraZeneca

21st Dec 2011 06:52

The Times's Tempus column looks at medical supplies firm Smith and Nephew which was once a perennial takeover target.After a re-organisation by its new Chief Executive the group is now focused on growth in the developing markets of China and India.A key metric for the firm though is how much elective surgery takes place in the US as its replacement hips and knees are a major driver of earnings. Recent numbers from a rival firm seem to imply more Americans are going under the knife now the economy is improving but Tempus says with a market cap at 11.6 times earnings Smith and Nephew is not worth a buy right now.The Questor column in the Telegraph hands out some clear advice on pharmaceuticals. Yesterday AstraZeneca announced two failures amongst its drug testing programme and its shares fell as a result. This is not, in itself, a problem as the firm is still likely to hit 2011 earnings per share targets. Questor argues the real problem is that the failure highlights the lack of a decent "pipeline" of new drugs coming down the track. So despite a market cap of of just 6.1 times earnings and a yield of 6.3% Questor says you're better off buying GlaxoSmithKline instead.bsPlease note: Digital Look provides a round-up of news, tips and information that is impacting share prices and the market. Digital Look cannot take any responsibility for information provided by third parties. This is for your general information only as not intended to be relied upon by users in making an investment decision or any other decision. Please obtain a copy of the relevant publication and carry out your own research before considering acting on any of this information.