3. GSK plc (LON:GSK)
Number of Hedge Fund Investors: 41
Forward P/E ratio as of August 10: 9.87
GSK plc (LON:GSK) is a global biopharma company that develops and manufactures vaccines, specialty medicines, and general medicines. The company is known for its medicines for treating diseases such as HIV, respiratory issues, cancer, immunology, neurology, metabolism, and cardiovascular conditions. GSK plc (LON:GSK) has a market cap of $82.10 billion as of August 10 and employs 70,000 people across 75 countries, operates 37 manufacturing facilities. GSK plc (LON:GSK) sells its products through wholesalers, pharmacies, hospitals, physicians, and other groups worldwide.
On July 3, GSK plc (LON:GSK) announced that they have restructured their existing collaboration with CureVac N.V. (NASDAQ:CVAC) into a new licensing agreement which allows GSK to develop and manufacture seasonal influenza and COVID-19 vaccines and rights to commercialize. This agreement is part of GSK’s ongoing investment in vaccine technologies aiming to create top-tier vaccines and enhance its mRNA capabilities. CureVac will receive an upfront payment of $511.61 million, with the potential for up to an additional $1.34 billion based on development, regulatory, and sales milestones. GSK plc (LON:GSK) is investing heavily in smart manufacturing within the biopharma industry and focusing on how technologies like robots, machine learning, and artificial intelligence can revolutionize the production of medicines and vaccines by real-time monitoring of production processes, improving yields, and predicting equipment maintenance needs. GSK plc’s (LON:GSK) successful launch of Arexvy, a vaccine for respiratory syncytial virus (RSV) in older adults, in both the U.S. and Europe also helped the company to achieve sustainable growth and expand profit margins. In its Q3 2023 investor letter, Ariel Global Fund made the following comment about GSK plc (NYSE:GSK):
“Global pharmaceutical and healthcare company, GSK plc (NYSE:GSK), also advanced in the period following a top- and bottom-line earnings beat and subsequent raise in full-year guidance. Shares were also aided by a successful U.S. and European launch of Arexvy, a respiratory syncytial virus (RSV) vaccine for older adults. Although risks around the Zantac litigation remain a concern, we believe GSK should generate sustainable growth and margin expansion as the company transitions its Pharma pipeline towards specialty medicines and vaccines. Furthermore, the company’s robust balance sheet provides the scope for bolt-ons, which has the potential to drive additional growth.”
Investing in GSK presents a compelling opportunity due to its forward P/E ratio of 9.87, which represents a 50% discount compared to the sector. As of the first quarter, the stock is held by 41 hedge funds for a total value of $1.84 billion. Fisher Asset Management is the largest shareholder in the company and owns 15.66 million shares amounting to $671.70 million as of March 31.
