The Week In Review: Hyperactive drug gives Shire a boost - Spend & Save - Money - The Independent

The Week In Review: Hyperactive drug gives Shire a boost

Shire Pharmaceuticals is one of
The Independent's share tips for 2005, and it got off to a roaring start.

Shire Pharmaceuticals is one of The Independent's share tips for 2005, and it got off to a roaring start. By the end of January it had cut a deal to license a promising new drug to treat hyperactivity in children, answering long-standing questions over what happens when its existing hyperactivity drug loses patent protection, perhaps early next year.

The shares are volatile and lost half their gains when Canada banned Shire's current hyperactivity drug, Adderall, which accounts for 45 per cent of group sales. It faces a nervous wait to see if Canada's move has affected prescribing levels in the US. But there is a high chance Canada's decision can be reversed on appeal.

Shire describes itself these days as a "pipeline company", although, by its own admission, it needs to buy in a high number of new drugs. Without them it may not still be growing by the end of the decade. There is often tough competition for such drugs, but at least Shire has cash of £760m. It is a higher risk than most FTSE 100 companies, but its shares are worth buying.

MEGGITT

This diverse specialist engineering company makes parts for civil and military aircraft, and other items including "counter-measures" (things flown or thrown from aircraft to decoy enemy missiles) and remote-control drones used for target practice. Civil aircraft work ought to continue to grow. But military spending cuts are high up the agenda now in Washington, and Meggitt can only hope that fewer new planes will mean more maintenance work on older ones. Hold.

OLD MUTUAL

This financial services group is exposed to currency and political risk, as well as the dangers of a hiccup in the restructuring of its South African bank and questions over its ability to do a useful deal in the UK. Old Mutual shares seem a little ahead of events. Wait.

JURYS DOYLE HOTEL

Shares in Jurys Doyle Hotel have had a strong run in the past year as investors warm to the roll-out of its native Irish hospitality around the UK. Its Jurys Inns are aimed at the cosmopolitan budget traveller, located in city centres with high quality fittings and a contemporary design. There is further room for expansion in the UK. Hold.

PERSIMMON

Have confidence that the housing market will avoid a crash and share prices will stay on an upward trajectory. Persimmon is one of the most highly-valued of all the housebuilders, but that is because it is one of the biggest and best-managed. It is still very cheap relative to the market. Hold.

HAYS

This specialist in the accountancy and finance, construction and IT industries looks well placed to benefit from the upturn in the market. It is expanding and has improved productivity, investing heavily in training and technology. With further share buybacks to come, the stock is worth buying.

RYANAIR

Ryanair is piling on new routes and extra flights, and last week it bought 70 new aircraft that will allow it to double its capacity by 2012. But in a competitive market where it already has a pretty poor reputation for service, it may not take much more bad publicity to send passengers elsewhere. Sell.

ASOS

Asos, which sells copycat celebrity clothing to wannabe Kate Mosses, has struggled to cope with sales which are growing at around 140 per cent a year. Its stock is spread across four warehouses, a cobbled together solution to its fast growth that proved to be inadequate and very badly managed. Until management figures out how to run the bigger business, sell.

MINERVA

The property company Minerva owns a large part of Piccadilly Circus and has grand designs for London's tallest tower. A new chief executive will be charged with selling off some assets and creating joint ventures and standalone property funds. That is the direction in which value-creation lies and the speculative investor might find it lucrative to back the new strategy.

SERCO

Britain has pioneered outsourcing and Serco is one of the more impressive of the companies to be managing vital services such the country's nuclear warning systems, young offenders centres, transport services including London's Docklands Light Railway, and military facilities. You don't see it in the news much, which tells you a lot about how little it messes up. Buy.

ASSOCIATED BRITISH FOODS

Associated British Food's products span Ryvita crackers to Twinings tea, and it also owns Primark, the cheap and cheerful fashion retailer which is expanding its 121-strong UK estate and opening stores in Europe. This column is a long-standing fan of the conglomerate and, although taking profits never hurts, the shares remain a core holding.

Dream duo trebles the profits again

Michael Dobson and Jonathan Asquith, the chief executive and finance director of Schroders, were like the cats who'd got the cream this week, unable to hide how pleased they were with themselves after trebling the fund management group's profits for a second year.

Although, by their own admission, such growth is unsustainable, the results completed one of the City's most impressive turnarounds - for which they deserve credit.

Since taking on what was a basket case three years ago, the pair have stripped out millions in costs, sharpened up their fund management team and started a crucial shift towards more profitable business. Although its lower-earning institutional mandates still account for some two-thirds of assets, its more lucrative retail division now constitutes almost half of new sales.

The question is whether the dream team can drive the business from recovery into its next phase of growth. With £759m of surplus capital waiting to be spent, Mr Dobson is on the hunt for small acquisitions.

The risk in the stock - as with any asset management business - lies in the fortunes of the equity markets.

Mr Dobson's enormous bonus (£1.8m in 2003, and sure to have been even higher in 2004) may also put off some investors. But with the wind well behind it, Schroders justifies a higher share price. Buy.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Life and Style
tech
Arts and Entertainment
Robin Thicke's video for 'Blurred Lines' has been criticised for condoning rape
music
News
Paper trail: the wedding photograph found in the rubble after 9/11 – it took Elizabeth Keefe 13 years to find the people in it
newsWho are the people in this photo? It took Elizabeth Stringer Keefe 13 years to find out
Arts and Entertainment
Evil eye: Douglas Adams in 'mad genius' pose
booksNew biography sheds light on comic genius of Douglas Adams
PROMOTED VIDEO
Sport
FootballFull debuts don't come much more stylish than those on show here
News
i100
Life and Style
Kim Kardashian drawn backlash over her sexy swimsuit selfie, called 'disgusting' and 'nasty'
fashionCritics say magazine only pays attention to fashion trends among rich, white women
Arts and Entertainment
TVShows like Agents of S.H.I.E.L.D are little more than marketing tools
Arts and Entertainment
Hit the roof: hot-tub cinema east London
architectureFrom pools to football pitches, rooftop living is looking up
Travel
travel
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SQL Developer - Watford/NW London - £280 - £320 p/d - 6 months

    £280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Senior BA - Insurance **URGENT**

    £400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

    Training Coordinator / Resource Planner - City, London

    £35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...

    Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)

    £400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...

    Day In a Page

    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    Exclusive extract from Janis Winehouse's poignant new memoir
    Is this the role to win Cumberbatch an Oscar?

    Is this the role to win Cumberbatch an Oscar?

    The Imitation Game, film review
    England and Roy Hodgson take a joint step towards redemption in Basel

    England and Hodgson take a joint step towards redemption

    Welbeck double puts England on the road to Euro 2016
    Relatives fight over Vivian Maier’s rare photos

    Relatives fight over Vivian Maier’s rare photos

    Pictures removed from public view as courts decide ownership
    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    Donatella Versace at New York Fashion Week