Last week we recommended selling shares in pets pharmaceuticals supplier Dechra Pharmaceuticals as it struggles against bigger competitors. It could be smart to switch the proceeds into a similar company – shares in Dublin-based pharmaceuticals distributor United Drug, which offers investors a way to buy into the growing trend for pharmaceuticals companies to outsource their activities.
IC TIP:
Buy
at
178p
Tip style
Growth
Risk rating
Medium
Timescale
Long Term
Bull points
- Successful diversification
- Opportunity in pharma outsourcing
- Dominant market position in UK and Ireland
Bear points
- Competition from logistics firms
- Reorganisation of Eire's health sector
The speed at which United has reinvented itself is impressive – from a glorified logistics company, with white vans scurrying all over Ireland delivering medicines to pharmacies, to a broad-ranged pharmaceuticals services operation, with its centre of gravity tilting towards the US.