Sunday share tips: Clinigen, UK companies

(Sharecast News) - The Sunday Times's Sabah Meddings told readers to 'hold' shares of Clinigen amid some resurgent 'market chatter' regarding a possible bid emerging for the medicines supplier.
Writing in the Times's 'Inside the City' column, the tipster said: "A challenge now will be whether to take a bet on a bidder emerging. Hold."

Nonetheless, analysts at Liberum believed the firm was the "most vulnerable" among its peers to a private equity bid.

The company provides clients with drugs not approved in a particular market or where there might be a local shortage.

In June, the company reiterated guidance for full-year sales but warned that its adjusted core earnings would be approximately 11.2% below a previous estimate for £130m.

The shares duly tanked and remained down by 20.6% over the past 12 months.

Clinigen laid part of the blame on weaker-than-expected demand for Proleukin, a treatment for kidney cancer.

Even so, analysts were at a loss to understand how the firm did not see that shortfall coming, resulting in long-time backer Jupiter duly dumping many of its shares.

The company was next due to update investors on trading on 13 July ahead of its full-year results in September.



The Financial Mail on Sunday's Midas column recommended readers 'buy' British, pointing to the recent wave of takeovers of UK companies by their foreign counterparts.

"Assess companies in the way that American prospectors do, seeking out businesses with key characteristics, such as valuable assets, loyal customers and the ability to create high-quality goods and services," Midas said.

To back up its case, Midas pointed to the raft of acquisitions news involving US buyers of UK firms with over 30 UK stock market-listed firms having been bought over just the past eight months.

Tellingly, said Midas, on average bidders were prepared to pay a takeover premium of over 40% in order to secure the deals that they wanted.

So, asked Midas, is the London stock market seriously undervalued? Do US outfits see something in UK businesses that homegrown investors are missing? Might British savers be in danger of losing out as a result?

For Midas the answer in every case was 'yes'.

"So many of the recent takeovers have been for companies with better technology, better design or better ideas than others in the field. That is no accident. The UK has a talent for innovation and US firms have worked that out," said Midas.

"UK investors will be rewarded by recognising it too."