Secondary Recommendation

UDG Healthcare

July 2016

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

UDG Healthcare, a healthcare marketing and contract drug packaging firm, is the perfect example of how exiting low margin activities and adopting highly profitable ones adds a “lorra” shareholder value, as the late entertainer Cilla Black might have said. Back in 2012 its shares were languishing at 160p but the £316m disposal of its legacy wholesale drugs business on 1 April completed a 16-year process in which management effectively swapped an activity generating 2% operating margins for two cracking businesses enjoying double-digit growth and generating 12% margins. Little wonder the shares celebrated by hitting new highs above 600p.Today, UDG is focused on two businesses; Ashfield, a healthcare marketing firm a ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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