4-Star Stocks Poised to Pop: GlaxoSmithKline

Based on the aggregated intelligence of 130,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, pharmaceutical giant GlaxoSmithKline (NYSE: GSK  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Glaxo's business and see what CAPS investors are saying about the stock right now.

Glaxo facts

Headquarters (founded)

Uxbridge, U.K. (1935)

Market Cap

$82.04 billion

Industry

Pharmaceuticals

Trailing-12-Month Revenue

$38.56 billion

Management

CEO Andrew Witty (since 2008)
CFO Julian Heslop (since 2005)

Return on Equity (average, last three years)

27.5%

Dividend Yield

5.2%

Competitors

Pfizer (NYSE: PFE  )
Schering-Plough (NYSE: SGP  )

CAPS members bullish on GSK also bullish on

Johnson & Johnson (NYSE: JNJ  )
General Electric (NYSE: GE  )

CAPS members bearish on GSK also bearish on

Merck (NYSE: MRK  )
Intel (Nasdaq: INTC  )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

Over on CAPS, 373 of the 392 All-Star members who have rated Glaxo -- or 95% -- believe the stock will outperform the S&P 500 going forward. These bulls include my Foolish colleague Brian Orelli (TMFBiologyFool) and TSIF, both of whom are ranked in the top 4% of our community.

In February, Brian tapped Glaxo as a great way to get out of the greenback:

Short-term [Glaxo] is a play on the dollar. If it weakens, the dividend and sales in $ terms will go up. Stock price is sure to follow. In the long-term [Glaxo] has so many development deals, that it'll be a [new drug application] powerhouse. But that's going to take time.

In a more recent pitch from two weeks ago, TSIF takes a shot:

While only a small percent of GlaxoSmithKline's revenues, they are only one of two major players who produce flu vaccines in volume. At this time, we could be looking at 2 or 3 winter flu shots instead of ONE. This is gravy to them if they can meet production as governments commit to buying their production runs if they meet quality standards. … Besides flu vaccines Glaxo is near a 5 YEAR low. P/B is higher than I personally buy into at 6, but is supported by very strong margins and 52% ROE. Forward P/E is below 9. Cash flow is in the billions and the 5.3% dividend is outstanding for this climate.

What do you think about GlaxoSmithKline, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 130,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Johnson & Johnson is a Motley Fool Income Investor pick. Intel and Pfizer are Inside Value selections, and the Fool owns shares of both. The Fool's disclosure policy always gets a perfect score.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 19, 2009, at 8:47 PM, Stephanie2045 wrote:

    The public is getting fed up with toxic vaccines. All

    these chemicals bio-accumulate in the body and creating

    more havoc in the patients. I say bear market for all the above, especially for Merk/MRK. 2-3 Flue vaccines? We

    are going to see an increase in Alzheimers and auto-immune disorders.It is already happening with Gardasil-

    memory impairment,autism,brain damage, brain atrophy.

    Do everything in your power to stay healthy and stay away from toxic stocks.

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