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The FTSE 100 index has witnessed some volatility recently due to the ongoing energy crisis as gas prices have touched record highs and caused several energy companies to collapse.
Moreover, fears of potential stagflation in the UK have gathered steam due to the pound sterling having the worst trading session of 2021, and as investors’ fear, the US may potentially raise its interest rates.
Here we will discuss two stocks from the FTSE 100 index, Scottish Mortgage Investment Trust (LON: SMT) and GlaxoSmithKline (LON: GSK) and explore the investment opportunity within:
- Scottish Mortgage Investment Trust PLC (LON: SMT)
Scottish Mortgage Investment Trust is an investment management company. It is the flagship trust owned by investment management company Baillie Gifford. The company’s cum par net asset value (NAV) was at 1,413.59 pence per share as of 27 September, compared to 1425.08 pence per share as of 24 September.
(Image source: EODHD/Others)
The share price movement of Scottish Mortgage Investment Trust PLC
The company’s shares were trading at GBX 1,434.00, up by 1.38 per cent today at 09:00 AM BST. The FTSE 100 index, on the other hand, was trading at 7,090.23, up by 0.88 per cent.
The company has a market cap of £19,957.88 million and a year to date return of 18.12 per cent as of 29 September 2021.
- GlaxoSmithKline PLC (LON: GSK)
GlaxoSmithKline is a healthcare and pharmaceutical giant focused on the development of vaccines, pharma and other products.
The company’s subsidiary ViiV Healthcare signed an agreement worth up to £35 million with Japanese pharma company Shionogi, to develop a potential next in line drug to GlaxoSmithKline’s HIV drug dolutegravir.
The news comes at an opportune time as GSK’s Dolutegravir patent is set to end by 2028. Dolutegravir is the world’s highest selling HIV drug.
Separately, ViiV’s second generation HIV injection, cabotegravir has been put under a fast track review by the US health and safety regulatory body, the Food and Drug Administration (FDA).
(Image source: EODHD/Others)
Share price movement of GlaxoSmithKline PLC
The company’s shares were trading at GBX 1,390.80, up by 0.56 per cent today at 08:57 AM BST. The medicine and biotech sectoral index, on the other hand, was trading at 17,891.4, up by 1.66 per cent.
According to data platform EODHD/Others, GSK’s 1 year forward price to earnings ratio is at 12.68x, compared to an industry median of 15.44x.
The company has a market cap of £ 69,588.85 million and a year to date return of 3.59 per cent as of 29 September 2021.
Bottom Line
Scottish Management Trust has about 37 per cent of its investments in US based growth stocks such as EV giant Tesla, vaccine maker Moderna and others. At the same time, GSK’s latest 2 pipeline updates from ViiV have the potential to add to its underlying growth in the future. However, the company has been facing some pressure from activist investors for a top management change.
