I’ve long been an advocate of investment trusts. I think they’re a great way for retail investors to gain exposure to a variety of stocks in a simple way. There’s also the bonus of, hopefully, some meaty long-term gains.

There are many trusts available to invest in. And many specialise in different areas. However, right now I have my eye on F&C Investment Trust (LSE: FCIT). Here’s why.

The lowdown

So, what exactly does this trust do? And how has it performed across this difficult year?

F&C invests in over 400 companies in 35 countries with the aim “to secure long-term growth in capital and income through a policy of investing primarily in an internationally diversified portfolio of publicly listed equities, as well as unlisted securities and private equity.”

The trust is run by fund manager Paul Niven, who’s been at the helm since 2014. Overall, it manages around £5bn worth of assets.

It’s been a tough year for the stock as it’s fallen around 9% year to date. This is largely due to the bleak economic environment. And with inflation on the charge across the globe, investor sentiment has been dented. The FTSE 100 is down 3% year to date. And in the US, the S&P 500 has plummeted by 18%.

Why I’d buy

With all of this, why would I buy the trust?

My main attraction is the diversification mentioned above. It holds hundreds of companies, including names like Microsoft, Amazon, and AstraZeneca.

By owning the stock, what I essentially do is offset my risk. This is because with a single investment I own a small slither of all of these companies. In the volatile times we’re experiencing, this is important for me.

What’s also an added bonus is the fact that its investment strategy aligns with mine. By this, I mean it buys for the long term. And as a Fool, I believe this is the best way to invest. While past returns are no indication of future performance, the last decade has seen the trust return 170% to its shareholders.

I also like the stock due to its stable nature. The trust is the oldest in the world, meanings it’s survived multiple crises. On top of this, it has increased its dividend payment for the last 51 years, highlighting its consistency.

The risks

With this said, there are risks with F&C.

They largely exist through its exposure to emerging markets, which make up 7.6% of its asset allocation. While these markets can offer great opportunities, they can also be volatile. And given the current economic conditions, these markets could suffer in the near future.

However, as mentioned above, this short-term volatility is of little concern to me. With a long-term approach, issues should be ironed out. In the long run, I back the trust to discover the opportunities that exist within emerging markets. I also like the diversification it could provide my portfolio with. While I don’t have the spare cash right now, if I did, I’d happily buy its shares today.

The post I’d buy this top investment trust today! appeared first on The Twelfth Magpie.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Amazon and Microsoft. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

With investors enduring a tough start to 2022, I’m been taking a closer look at FTSE 100 stocks that tend to experience less price volatility relative to the market.

These are known as low beta stocks. In theory, anything with a beta of below one should move less in line with the index (which always has a beta of one). By contrast, stocks with a beta of over one could give investors a more bumpy ride. 

FTSE 100

The essential nature of what National Grid (LSE: NG) does — “connecting millions of people to the energy they use” — makes the company a potentially great stock to hold at times like these. The Grid has a beta of just 0.3, according to data from Stockopedia. This should make it far less prone to violent market moves.

Another attraction is the dividend stream. In its current financial year, the company is expected to return 50.8p per share to its owners. Using today’s share price, that gives a yield of 4.7%. So, even if it did fall back, there’s a nice payout to compensate. 

The P/E of 17 is higher than the five-year average of just under 14. However, this makes sense considering how rattled investors have been recently. One potential drawback is that the shares probably won’t fly when markets recover.

Resilient sector

As sectors go, anything to do with healthcare tends to hold its own when investors get skittish. Hence, a company like GlaxoSmithKline (LSE: GSK) may offer me some protection. In line with this, GSK has a beta of 0.6. 

The shares are up slightly so far this year, although this may be more to do with Unilever sniffing around its consumer healthcare business. It will be interesting to see what under-fire CEO Emma Walmsley has to say about the rejected bid when the company reports on Wednesday.

At 3.3%, GSK stock comes with a decent dividend yield. It’s also cheaper than FTSE 100 peer AstraZeneca at less than 14 times earnings. That said, its drugs pipeline could do with a shot in the arm and remains a potential risk. 

‘Buy again’ brands

Speaking of consumer goods companies, a final stock I’d consider buying to mitigate market volatility would be Reckitt (LSE: RKT).

Like the other stocks mentioned, Reckitt has a low beta (0.3). It also possesses a bursting portfolio of ‘sticky’ hygiene, health and nutrition brands. While the rising cost of living can force people to reel in their discretionary spending, products that keep things clean and safe are unlikely to be sacrificed, especially following a global pandemic. 

My only concern with Reckitt is that it hasn’t learned from its horrible acquisition of the infant formula business from Mead Johnson a few years ago. This brings me to a vital point about low-beta stocks.

No guarantees

A low-beta value now does not guarantee anything about the future performance of a company’s share price. Before the Financial Crisis, FTSE 100 juggernauts like Lloyds Bank were regarded as relatively safe destinations for investors’ money. That hasn’t worked out well. 

Therefore, a vital point to grasp is that beta values change over time. Nor are they a replacement for in-depth research. This is why I will continue to diversify my portfolio across all sorts of quality companies, thereby giving myself a better chance of growing my wealth slowly but surely over the long term.

The post 3 ‘safe haven’ FTSE 100 stocks to buy appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline, Lloyds Banking Group, Reckitt plc, and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

AstraZeneca

Pharmaceuticals giant AstraZeneca (LSE: AZN) was one of the shining lights to come out of the pandemic. Its vaccine development aided the firm in producing a solid set of half-year results. Revenues were up 23% (14% without vaccine sales), and product sales rose 24% for the period compared to the year before. Its rising revenue in emerging markets is a major factor for me. For HY21, sales in these markets rose 21%. The long-term benefit this could have on the AstraZeneca share price makes it a tempting proposition for my portfolio, especially at a potentially slashed price.

What concerns me is the 25% fall in profits reported for Q2 2021. Should this continue, this could have negative implications for AstraZeneca in the future.

BP

Long-established FTSE 100 stock BP (LSE: BP), for me, would also be a good addition. When looking at BP, a few key factors stand out.

Firstly, and as my colleague Rupert Hargreaves analysed in greater depth, the firm is making strides in planning for the future. It has a clear strategy to increase its renewable energy production and has set targets along the way to achieve this. As such, this FTSE 100 stock has loads of potential to rise in price. Trading at an already reasonable 308p, if the price fell further, I would jump at the chance to add BP to my portfolio.

BP also has some solid financials. Not only has it cut its net debt by 20% within a year, but predictions also suggest that it will report a net profit of $10.5bn in 2021. This should lead to a leap in the share price.

However, the inevitable switch from gas and oil to renewable energy could provide a stumbling block for BP. While I think its plan in place is a good one, if things were to go wrong, this could have negative connotations for the firm. For example, if profitability were to be impacted, would BP be able to retain its current size?

Why I’d buy

With that said, I still think these two FTSE 100 stocks would be a great addition to my portfolio. Both have long-term potential as they adapt to new climates. AstraZeneca has benefited from its investment in emerging markets, while BP is making headway in its renewables transition. If both were to fall in price amid a potential crash, I would certainly be keen to buy them.

The post 2 FTSE 100 stocks to buy in a market crash appeared first on The Twelfth Magpie.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Scottish Mortgage Investment Trust

The Scottish Mortgage Investment Trust (LSE: SMIT) has seen spectacular returns over the past 18 months. Up over 135% from the beginning of 2020, and 13% year-to-date, the trust run by Baillie Gifford continues to go from strength to strength. I like it because it measures performance over a five-year period. Within the last five years, SMIT has seen returns of over 345%. Its top holdings are diversified — and as of June 2021 included Illumina, Moderna, and NIO. To further this, I have confidence in the fund managers and their judgment; seen by their recent decision to halve SMIT’s position in Tesla.

The trust saw a near 30% fall in February, in part due to the tech sell-off, which highlights that it’s not immune to periods of volatility, regardless of its diverse portfolio. However, for me, this doesn’t pose an issue. I’d buy this UK share today to own it for a minimum of five years. If the next five years follow a similar pattern to the previous five, there’s the potential for me to see a healthy return. Large exposure to tech stocks, however, could lead to issues in the future as we see the uncertainty surrounding regulation. 

AstraZeneca

Recently in the spotlight due to its Covid-19 vaccine, AstraZeneca (LSE: AZN) is up 12% in the past six months. Although this UK share has been volatile over the past year amid concerns over possible vaccine side-effects and late deliveries, late July saw the release of its half-year results for 2021. There were many positives to take away. Revenues were up 23% (14% without vaccine sales) compared to half-year 2020, while product sales rose by 24%. With this said, an issue was the 25% fall in profits for Q2 2021.

However, what really draws me to AstraZeneca is its long-term outlook. As highlighted in its latest results, its recent acquisition of Alexion Pharmaceuticals should help the company achieve a transition to sustainable growth, allowing it to expand into the rare disease medicines industry through Alexion’s complement-biology platform. Pascal Soriot, the firm’s CEO, also mentioned the continued investment in R&D, showing a strong focus on a long-term outlook.

Why I’m buying

These are two UK shares that I deem a good addition to my portfolio. Both stocks have seen solid growth over the past five years – and I expect this to continue. While SMIT offers access to a variety of sectors, most notably the expanding tech sector, AstraZeneca is in a pharmaceutical industry that has the capability to flourish and grow in the future. With the UK economy still on the road to recovery post-pandemic, I think now is the perfect time for me to buy.

The post Why I’d buy these 2 UK shares today for long-term growth appeared first on The Twelfth Magpie.

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Charlie Keough owns shares of Scottish Mortgage Investment Trust and NIO. The Motley Fool UK owns shares of and has recommended NIO Inc. and Tesla. The Motley Fool UK has recommended Illumina and Moderna Inc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Unfortunately, I’ve no idea when this will happen. Positive news on Covid-19 could see markets lurch even higher. Nonetheless, I can plan for it by owning low-beta or defensive shares from the FTSE 100. These tend to be less volatile than the overall market.

National Grid

Utilities tend to perform better than the majority of stocks during a crash. We wouldn’t get far without water, gas and electricity. My preferred pick from the sector has long been power provider National Grid (LSE: NG). In contrast to cyclical stocks like airlines, NG’s share price recovered quicker than most after the coronavirus market crash. 

Naturally, there’s a flip side to this. In more normal times, utilities are unlikely to give some investors the capital growth they’re seeking.

Nevertheless, I think NG is still worth owning. This is particularly the case if I were after a solid, dependable dividend stream to keep the lights on. Right now, the shares yield of 5.5% — far more than I’d get if I kept my money in a Cash ISA.

GlaxoSmithKline

Like utility stocks, anything health-related also tends to be a good bet. We’re always susceptible to illness, regardless of what stock markets are doing.

When it comes to FTSE 100 stocks, investors have two options: AstraZeneca and GlaxoSmithKline (LSE: GSK). Despite ongoing internal issues, the latter is still my preferred pick. As well as being far cheaper to acquire than its peer, Glaxo’s soon-to-be separate consumer division gives it a string to its bow that AstraZeneca lacks.

Sure, the forthcoming cut to the annual dividend (from 80p to 55p) isn’t ideal. However, this was less than analysts had been expecting. The revised payout should also be sufficient to soothe the pain investors may feel as a result of a wider market sell-off.

Unilever

A third part of the market that tends to hold its own is the consumer goods sector. This is why FTSE 100 giant Unilever (LSE: ULVR) will always feature on my list of top shares to own for a market crash or correction.  People will still eat ice cream, use deodorant and wash their clothes. And thanks to its bumper portfolio of recognisable, sticky brands, Unilever is perfectly placed to cater for this.

For me however, Unilever is a stock that can probably be held for decades without issue. In addition to its global presence, the company has shown it can make consistently excellent returns on the money it puts into the business.

There’s also a decent dividend stream that can be reinvested, allowing holders to benefit even more from compounding. Unilever currently yields 3.4%. 

Stay diversified

Of course, even the most defensive shares can still fall in a crash. Practically everything tumbled in March 2020. This is why spreading my money around a group of companies, rather than just two or three, is prudent.

If I wanted to be even more diversified, I’d also own other assets, such as bonds and gold. These are unlikely to give me a better return than shares over the long term. But history has shown these tend to rise when markets fall.  

The post 3 FTSE 100 stocks to buy for a stock market crash appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline, National Grid, and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

I’ve been willing to give pharma giant GlaxoSmithKline (LSE: GSK) the benefit of the doubt over the years. While GSK shares have remained stuck within the trading range of 1,000p–2,000p for over two decades, the dividend stream has remained rewarding for those owning the stock.

Does confirmation of a forthcoming cut to the payout change things? Here’s my take.

Wait – the dividend’s being cut?!

That’s the plan. Let’s briefly recap yesterday’s news. It was announced Glaxo would list its consumer healthcare business as a separate company in the middle of 2022. By doing this, the FTSE 100 member aims to generate cash to use for developing drugs at its pharmaceutical business (New GSK). The latter has struggled in recent years due to a wobbly pipeline. Clearly, the global pandemic hasn’t helped either. Glaxo said it was now aiming to grow sales here by more than 5% a year to 2026. 

In line with this plan, Glaxo announced yesterday that its big-but-stagnant annual payout would be cut. In 2022, the aggregate dividend from GSK and the now separate New Consumer Healthcare business will likely be 55p. That’s a little over 30% lower than the amount investors currently receive (80p). From 2023, New GSK will pay 45p per share to holders. 

While this cut is far from insignificant, it’s less than analysts had feared. This may explain why the GSK share price reacted favourably to yesterday’s news, at least initially. Unfortunately, this buying pressure gradually dissipated as the day went on as investors digested the news.

So, would I buy GSK shares now?

On the one hand, I do see some upside. Historically, many spin-offs tend to have done well once they’ve been released from the shackles of their parent companies. Considering the strong brands it shares with Pfizer (Sensodyne toothpaste, Advil painkillers), I’m can instantly think of worse firms to be invested in than New Consumer Healthcare.

Owning shares of both businesses in such defensive sectors might also be prudent if (and that’s a big ‘if’) markets become increasingly choppy as inflation fears grow. Moreover, GSK shares look good value relative to peers at 14 times forecast earnings. And while a dividend cut is never good news for income investors, the payouts should still be attractive enough. 

On the flip-side, I do understand why some existing holders may be mulling over whether to sell. Yes, the pandemic has proved disruptive for most businesses. Nevertheless, the GSK share price hasn’t fared well under CEO Emma Walmsley’s leadership.

Sure, earnings targets provide clarity and sound great on paper, but I’m sceptical over whether the new strategy can really be achieved under the current management team. Drug development can also be a painfully slow process, regardless of who’s in charge and how much money is thrown at it.

Bottom line

Time will tell whether those owning GSK shares are truly willing to embrace the new strategy. If I already held the shares, I’d probably keep holding for the income they generate and hope dividends would rise in time.

If I favoured capital growth over income and didn’t already own the stock however, I’d certainly take the time to look at other opportunities. Today’s rather muted opening suggests I’m not the only one to think that greater gains can be achieved elsewhere. 

The post GSK shares: should I buy now? appeared first on The Twelfth Magpie.

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Paul Summers has no position in GlaxoSmithKline. The Motley Fool UK has recommended GlaxoSmithKline. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

GSK shares: FTSE 100 laggard

Based purely on the performance of its share price over the last five years, it’s tempting to give GlaxoSmithKline a ‘hard pass’. GSK’s value is now 10% lower than it was in April 2016. It’s also been one of the worst shares to own in the FTSE 100 over the last year.

Considering the recovery seen in markets since the 2020 crash — not to mention Glaxo’s status as the biggest producer of vaccines in the world — this is quite some ‘achievement’. Then again, the fact that the company hasn’t come up with a Covid-19 vaccine so far hasn’t gone down well. It also helps to explain why shares in peer Astrazeneca have soared. 

On top of this, there’s a distinct possibility that GSK will be forced to reduce its dividend payouts going forward to free up cash to invest in its drug development pipeline. This makes complete sense, but it’s not what those who own the shares for their dependable income want to hear. In fact, it underlines the point that no investment is ever devoid of risk.

So, why are Hargreaves Lansdown investors suddenly interested?

Activists assemble

It all seems to be down to recent news that activist investor Elliott Management has declared a multi-billion pound stake in GSK. Activist investors tend to get the market excited because they can be a catalyst for change at a flagging company.

US-based hedge fund Elliott certainly has form when it comes to ruffling feathers. It previously pushed for change at Premier Inn owner Whitbread and had a few bruising encounters with FTSE 100 miner BHP Group.

Of course, whether its involvement leads to a seismic change of strategy remains to be seen. It certainly comes at an interesting time given GSK’s plan to list its consumer healthcare business as a separate entity next year. There’s always a chance that its involvement could make things worse.

Regardless, I think there are reasons to be positive about GSK shares. 

Defensive play

For one, demand for Glaxo’s products, such as the highly successful shingles jab Shingrix, should recover once the pandemic has passed. A host of new launches are also expected over the next five years.

In addition, there’s a lot to be said for buying highly defensive shares now. With markets around the world looking frothy once again, any wobbles will likely be felt most in hyped growth plays, not stock-for-all-seasons Glaxo. Even if markets were to continue rising, it’s quite possible that companies offering value will be the ones to thrive.

Moreover, I think those dividends are worth grabbing. A likely 80p per share return for 2021 gives a yield of 6%. If the payout is reduced by 20% in 2022 (the consensus forecast), the subsequent 4.8% yield is still very decent.

And then there’s the price. At 13 times forecast FY21 earnings, I think Glaxo offers great value.

Bottom line

GSK shares have been in the doldrums for a long time and perhaps justifiably so. It remains a contrarian bet for now.

Notwithstanding this, I’d be comfortable buying GSK shares at today’s price. As with investing in general, patience is key.

The post Hargreaves Lansdown investors are buying GSK shares. Should I? appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline and Hargreaves Lansdown. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Peaking at just under £30 on September 18, 2018, the Accesso Technology (LSE: ACSO) share price went on to see a steady decline. This was the case until late 2020, when things started to pick up for the AIM-listed company. In the past six months, the share price has increased over 180% and year-to-date prices are up 250%! A year ago the price was almost 223p. It closed Tuesday at 720p. Let’s take a closer look at why.

What is Accesso Technology?

Accesso is a virtual queuing, ticketing, and distribution company. Its solutions operate in theme parks, water parks, cruise lines, museums, and various other attractions. Accesso eliminates the hassle of queuing, instead you get a token that tells you when it’s your turn. Accesso functions at over 1,000 venues in over 30 countries. This is a huge reach to the guest experience and tickets & distributions markets, which are valued at $1.5bn and $1.9bn respectively.

Bull case for Accesso Technology share price

The recent increase in share price can be largely attributed to the recent full-year results issued by Accesso. Revenues of $56.1m exceeded revised projections for 2020 by 3%. This increase in revenue was in the face of multiple worldwide lockdowns. This gives me huge confidence in the company’s direction for 2021.

The firm also announced a stronger liquidity position, with a rise in net cash to $29.7m. This was also backed up by a new three-year debt facility, which will provide $18m of liquidity. This gives the company a strong cash base moving forward.

Most importantly, as lockdown restrictions are lifted, people will want to visit theme parks again. The guest experience industry will thrive as people are allowed to visit their favourite attractions freely again. Accesso’s business model is built on this freedom and will profit directly from this reopening.

Bear case for the share price

The fact that the Accesso Technology share price had been falling since 2018 — before the pandemic shut down the attractions industry — does worry me.

The company was a classic example of an overinflated growth share, I feel. It offered a new, exciting technology that investors flocked to, inflating the price/earnings ratio to 70 at one point. This came at the cost of neglecting some of the shaky fundamentals that began to present themselves in the 2018 annual report. By 2019, cash issues led to the Accesso bubble bursting, sending share prices tumbling. If shaky management happened once, who’s to say it won’t happen again?

There’s also the problem that the pandemic still exists. Although vaccines are being rolled out, there are some concerns about the AstraZeneca vaccine’s safety that have impacted the rollout in some countries. And distribution globally for all vaccines remains patchy. This could halt the opening of the public attractions that drive Accesso’s business.

My Verdict

But I believe the Accesso Technology share price will continue to rise throughout 2021 as much of its business reopens, even if not as fast as it has done. The firm has also strengthened its balance sheet throughout 2020, learning from previous mistakes. There are still risks to consider, but I think the worst is behind this company. Therefore, I could see this stock being a solid addition to my portfolio.

The post Will the Accesso Technology share price keep climbing? appeared first on The Twelfth Magpie.

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Dylan Hood owns AstraZeneca shares. The Motley Fool UK has recommended Accesso Technology. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Could we get past 7,000 next month? History suggests it’s not out of the question. 

FTSE 100: Santa rally ahead?

December has earned itself a reputation for being the strongest month of the year for UK share prices. In fact, research by Stephen Eckett (and published in Harriman’s Stock Market Almanac) has shown that the FTSE 100 index has fallen just three times in the month since 1995. It even has a habit of outperforming the US S&P500!

Interestingly, there doesn’t appear to be one clear reason for this. What we do know however, is that the final two weeks of December tend to be particularly strong.

Known as the ‘Santa Rally’, here’s why I think this may happen again in 2020.

Why 7,000 might be broken

It seems logical that further good news on coronavirus vaccines could push the FTSE 100 higher. Having received positive results from Pfizer, Moderna and AstraZeneca in the past few weeks, it’s now the job of the Medicines and Healthcare products Regulatory Agency (MHRA) to give its approval. Expect fireworks if we get this in December.

The psychological effect of emerging from lockdown restrictions shouldn’t be underestimated either. While many UK businesses will continue to struggle, the mere belief that things are improving could send share prices higher on its own. Remember — the market is more interested in what will happen next, not what’s happening now.

Despite recent gains, UK shares also remain cheap relative to elsewhere in the world. News of a Brexit trade deal would undoubtedly go some way to addressing this. Further monetary stimulus in the US would be another boost.

On the other hand…

Of course, there’s also no shortage of reasons for why the FTSE 100 will fail to break through the 7,000 barrier.

Aside from the possibility of unexpected hurdles for the aforementioned vaccines, there are fears that coronavirus infection rates could rise as a result of families being allowed to meet over Christmas. This ‘two steps forward, one step back’ state of affairs could slow momentum.

With chancellor Rishi Sunak warning that the full economic impact of the pandemic has only just begun, many in the UK may also be inclined to keep their purse strings tightened until 2021. That’s problematic when you consider how dependent most of the UK’s listed retailers — and their share prices — are on the festive period for sales.

In addition to all this, many traders may begin to bank whatever profits they’ve managed to make in 2020. 

Don’t time the market

It is, of course, impossible to say for sure where the FTSE 100 will be at the end of next month. As such, my investment strategy remains the same. Like top UK fund manager Terry Smith, I’m looking for top-quality companies trading on reasonable valuations that I can hold for years. 

After a rollercoaster 2020, a soaring FTSE 100 would be a nice Christmas present for UK investors. Just don’t bank on it. 

The post Here’s why I think the FTSE 100 could smash through 7,000 in December appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

A new Covid-19 vaccine from AstraZeneca

The trial results were positive, but the AstraZeneca share price barely moved on the news. The muted response is likely attributable to the company’s ‘no profit’ policy for its vaccine launch. The vaccine, AZD1222, was tested using two separate dosing regimens.

The first dosing regimen consisted of a half then full dose one month apart and showed a 90% efficacy. Patients in the second dosing regimen received two full doses one month apart and showed a 62% efficacy. The combined results showed a 70% overall effectiveness.

While this would be considered a breakthrough a few months ago, in comparison to the 95% efficacy of Pfizer’s and Moderna’s vaccines, AZD1222 appears underwhelming. However, it has a distinct advantage over both.

The vaccines from Pfizer and Moderna require cold storage conditions of -70°C, and -20°C, respectively. AstraZeneca’s vaccine can be stored for up to six months at a temperature of 2°C–8°C.

Maintaining sub-freezing temperatures in transit is a complicated and expensive process, making the availability of the vaccine in poorer nations minimal. By not requiring less demanding storage temperatures, AZD1222 may prove to be the most viable vaccine candidate for mass distribution.

A biotech stock opportunity

The vaccine was developed and manufactured with help from Oxford Biomedica (LSE:OXB) as part of a supply agreement signed in September. I’ve discussed the biotech stock in previous articles. As a quick reminder, Oxford Biomedica is a gene and cell therapy group. It offers a proprietary platform, LentiVector, that allows pharmaceutical companies to develop new drugs at a significantly reduced cost.

The supply agreement is active for 18 months. The biotech company is responsible for the manufacturing of AZD1222 until the end of 2021 unless the contract is extended.

Initially, the firm received an upfront payment of £15m from AstraZeneca. It expects to generate an estimated £35m from this contract alone by the end of 2021. This represents a huge growth opportunity for the company. The combined £50m revenue represents nearly 80% of the total revenue achieved in 2019 pre-Covid-19.

With this added boost and the continual growth of its LentiVector platform, I’ve forecasted total revenue for 2021 to be in the £100m–£120m range – almost double what it is today.

However, it is essential to remember that this additional revenue is only temporary and may cease to exist after 2021. Still, it does grant a significant boost in available capital for the business to reinvest and increase the value of its platform for its clients.

The bottom line

AstraZeneca’s noble non-profit stance is a social victory. However, Oxford Biomedica is the real financial beneficiary of AZD1222’s successful trials. The Covid-19 vaccine still requires regulatory approval, but AstraZeneca has already begun the filing process with multiple regulatory bodies around the world.

The post Covid-19 vaccine: 1 biotech stock that profits from AstraZeneca’s success appeared first on The Twelfth Magpie.

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Zaven Boyrazian owns shares in Oxford Biomedica. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.