Published: May 11, 2009
The
correct answer is 
(A.) GlaxoSmithKline (GSK)
Headquartered in Great Britain,
GSK is the world's fourth largest
pharmaceutical company with annual
revenue of nearly US$36 billion
dollars. The company manufactures
and markets a number of
over-the-counter products such as
Tums and Gaviscon, dental products
such as Aquafresh, the smoking
control best-seller Nicorette, and
the billion-dollar OTC diet product
Alli.
When swine flu broke out in Mexico,
related investments were already in
play by the morning of the outbreak.
Predictably, the makers of the
antiviral medications used to treat
swine flu were up; Roche Holding AG
(OTC: RHHBY) produces TAMIFLU and
GSK manufactures Relenza.
GSK is also looking to steady
profits from vaccines. It already
supplies one quarter of the world's
vaccines and has made this a major
focus of research and development.
In early 2009, the company had more
than 20 new vaccines in clinical
development.
Though five of GSK's best-selling
drugs lost patent protection in
2008, the company used this event as
a catalyst to refocus its research
efforts on smaller drugs and smaller
markets. That's why income-oriented
investors might consider buying GSK
for long-term income. The company
pays a level quarterly dividend for
each of the first three quarters,
and a higher dividend in the fourth
quarter. GSK's new CEO, Andrew
Witty, is also seeking to use the
company's large cash balance of
US$8.8 billion to develop steady
earnings. He recently completed a
US$3.6 billion acquisition of
Stiefel Laboratories.
Swine flu may not be the epidemic
everyone expected, but it's a lesson
in how stocks can rise as people
react to world events. And although
capitalizing on short-term trends is
an important idea in the investing
world, income investors know it's
also important to consider long-term
potential. That's why the latest
issue of High-Yield International
takes a look at the market effects
of swine flu and offers two in-depth
looks at picks positioned to help
income investors benefit from a
renewed global vigilance about
vaccines. To learn the names of the
picks, and to learn more about
High-Yield International,
please visit this link.
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