The company, which manages, sells and distributes pharmaceutical products, reported a “strong financial performance” over the year to the end of June, with contract wins in Africa and the Asia Pacific region as well as good trading at its Commercial Medicines division.

Revenue moved 28% higher at constant currency to £381.2m with adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) increasing by 19% to £76m. Pre-tax profit came in at £35.9m — a stonking 155% higher than in 2017. 

In addition to these positive numbers, Clinigen has acquired the global rights outside of the US to kidney cancer therapy Proleukin since the end of the reporting period. The global rights to infection-fighting drug Imurkin outside the US, Canada, and Japan were also secured as part of its ‘buy and build’ strategy. 

So why were the shares 10% lower this morning? It all seems to be down to the company’s decision to conduct a placing to institutional investors to raise up to £80m. This cash will then be used to part-fund the $150m purchase of packaging, labelling, and warehousing specialist CSM. In addition to this purchase, Clinigen also announced that it would be buying privately owned Swiss-based pharmaceutical business iQone for €7.5 million. 

While some investors may be a little concerned by this spate of buys, it’s worth pointing out that the integration of rival Quantum Pharma — purchased last year — has already generated £1.1m in cost synergies. 

Other than that, there doesn’t seem too much to worry about. Indeed, according to CEO Shaun Chilton, 2018/19 is likely to be “another year of good progress” for Clinigen as it attempts to “capitalise on the substantial long-term growth opportunity” in its markets.

Given this, a valuation of 17 times earnings for the new financial year (before this morning’s fall) already looked reasonable to me.

I’m inclined to regard today’s dip as an opportunity for new investors to climb on board. 

Buy on the dips

Another growth stock I remain positive on is veterinary services provider CVS Group (LSE: CVSG), despite concerns over whether the company can continue to recruit enough staff following Brexit.

Today’s full-year figures for the 12 months to the end of June (which included a 3.2% fall in pre-tax profit to 14.1m) haven’t been particularly well received by the market, even though the company did already signpost being cautious on earnings some time ago.  

Personally, I still think there’s a lot to like. Revenue moved 20.4% higher to £327.3m with like-for-like sales rising 4.9%. Adjusted EBITDA was 13.3% higher at £47.6m and there was also an encouraging 18.3% rise in owners signing up to its Healthy Pet Club loyalty scheme, bringing total membership numbers to 362,000.

No stranger to acquisitions, CVS purchased and integrated 52 surgeries over 2017/18 with another 16 secured after the end of the financial year. This now brings its entire estate to 491 surgeries. Make no mistake, it’s a major player in what it does. 

At 20 times earnings for the new financial year, the company isn’t cheap considering its rapidly growing debt pile (due to the aforementioned acquisition spree) but its valuation is certainly a lot more attractive than this time last year.

Once short-term issues are resolved, I’m confident the share price will recapture its lost form. 

The post Have £2,000 to spend? These out-of-favour growth stocks could still help you retire early 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.

My first stock has risen by 211% over the last 10 years. Animal genetics company Genus (LSE: GNS) released its half-year results today, giving us a chance to see whether this momentum is being maintained.

Double-digit gains

Revenue at the Basingstoke-based firm — which breeds genetically-modified pigs and cows — rose by 7% to £238.6m during the six months to 31 December. Adjusted operating profit including joint ventures rose by 18% to £31.5m, implying a respectable adjusted operating margin of 13.3%.

Cash generated by operations improved, rising to £22m. That’s nearly double the £13.5m generated during the same period in 2016. The interim dividend was increased by 9.5% to 8.1p, reflecting higher profits and stronger cash flow.

These figures all seemed fairly positive to me, but they weren’t enough to stop the shares falling by around 5%. Do investors need to be worried?

Headwinds could slow growth

Last year, Genus benefitted from unusually high pig prices in China. The firm says that pig prices are now “returning to a more normal level,” reducing profits from this region.

Currency movements could also put pressure on profits. Commenting today, chief executive Karim Bitar said that shifting exchange rates are expected to reduce reported profits by around £3m this year.

Broker consensus forecasts indicate that Genus is expected to report adjusted earnings of 71.5p per share for 2017/18. This is only 3% more than last year’s adjusted figure of 69.4p per share.

Although the headwinds described today sound like short-term issues to me, I’m not convinced now is the right time to buy. With the shares trading on a forecast P/E of about 30, I think there might be better buying opportunities later this year.

I’m tempted by this stock

Shares of pharmaceutical services firm Clinigen Group (LSE: CLIN) have also fallen this week following the firm’s interim results. But I’m more inclined to see this as a buying opportunity.

Clinigen specialises in providing unlicensed medicines to doctors and other healthcare professionals. These might be used in trials or to treat a patient with specific requirements. It’s a bigger business than you might think. The group ships 3.5m units for patient treatment each year to more than 111 countries. In 2017 it provided access to 1,700 unlicensed medicines.

Expansion has come through organic growth and acquisitions. Two acquisitions were made during the first half of the year, including a £143.5m deal to buy AIM-listed firm Quantum Pharma. These deals should expand its geographical footprint and its product portfolio.

This could be the right time

Sales rose by 28% to £167.8m during the six months to 31 December, while adjusted earnings rose 13% to 21.2p. Cash generated from operations rose from £7.7m to £34.3m, giving me confidence that the group should quickly be able to repay the debt used to buy Quantum.

My feeling is that after a period of major investment, Clinigen is now well positioned for further growth.

Analysts expect the group’s adjusted earnings to rise by 11.5% to 46.6p per share this year, putting the stock on a forecast P/E of 20. Earnings are expected to accelerate by a further 18% in 2018/19. I believe this stock could be a profitable growth buy at current levels.

The post 2 stunning growth stocks you might regret not buying appeared first on The Twelfth Magpie.

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Roland Head 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.

Shares in Clinigen Group (LSE: CLIN) have more than four-bagged over the past five years, as earnings have been growing in double-digits every year. The year to June 2017 brought in a 25% rise, and analysts are predicting 13% this year followed by 19% next.

I was happy to read the company’s first-half trading update on Wednesday, which told us that the first half has been “in line with the board’s expectations.” Revenues are up by around 28%, with gross profit up by about 10% — the latter is, apparently, the board’s preferred measure of top-line growth.

So I was surprised to see the share price down by 3% at the time of writing, to 1,003p. But I guess that’s part of the fickleness of a high-flying growth stock, which can falter when figures fail to beat expectations.

Excellent growth

The highlight was the company’s Commercial Medicines division, which apparently accounts for 49% of gross profit, and which “delivered excellent growth, with all products across the portfolio performing strongly.“

Unlicensed Medicines, representing 41% of gross profit, seems to have had a mixed time, but “a significant number of new programmes now starting” are expected to boost performance in the second half.

The Clinical Trial Services business, with 10% of gross profit, saw its performance fall back from last year’s, and that might also have contributed to the morning’s sell-off. But Clinigen says it should do better in the second half.

On current growth forecasts we’re looking at a forward P/E of 21 for June 2018, dropping to 18 on 2019 expectations. Dividends are currently yielding only around 0.5%, but they’re very well covered and strongly progressive.

And even though the share price has already climbed, I’m still seeing an attractive long-term valuation here.

10-bagger

Shares in JD Sports Fashion (LSE: JD) have done even better, 10-bagging in five years. And even after that, with the shares at 390p, we’re still only looking at forward P/E multiples of 13 to 15, which is around the FTSE 100‘s long-term average.

Admittedly there’s not much in the way of dividend cash right now, with yields similar to Clinigen’s 0.5% level. But we’re looking at cover of around 14 times by earnings, and I can see the company morphing into a solid cash cow in future years.

Tuesday’s update which covered the Christmas trading period impressed me, especially when so many other retailers have been feeling the high-street pinch. And instead of falling earnings that some are now predicting, JD has upped its full-year pre-tax profit guidance to £300m, ahead of the market’s £270m-£295m prior consensus.

Online business is expanding too, and I’m becoming more and more convinced that the retail future will belong to companies that combine internet sales with physical stores — the demand for the ability to collect and/or return goods in-store is growing.

Though I don’t pay much attention to share price charts, I am drawn to the fact that JD shares are still significantly below their May 2017 peak of over 450p — I thought the shares were fair value then, and now I reckon I’m seeing a bargain. The year ends 31 January, with results due 17 April.

The post 2 multi-bagging growth stocks I’d buy for 2018 appeared first on The Twelfth Magpie.

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Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Clinigen. 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.

Furthermore, increasing dividends indicate management confidence in the company’s long-term future. Given the uncertainty present in the UK economic outlook, this could positively catalyse investor sentiment over the medium term.

With the above in mind, here are two shares which could be worth buying due to their positive income outlooks.

Improving performance

Reporting on Thursday was pharmaceuticals and services company Clinigen (LSE: CLIN). Its full-year results showed a rise in adjusted gross profit of 22%, with the company’s organic growth strategy and acquisition activity both proving to be positive catalysts. Cash flow generation was strong, with cash generated from operations rising by 11%. This allowed the company to pay a dividend which was 25% up on the previous year.

Looking ahead, the company has significant growth potential. Its business units all performed well in the most recent year, with it enjoying particularly strong growth in Africa and Asia Pacific. Its strategy to build scale and efficiency should be enhanced by the post-period end acquisition of Quantum Pharma for £150.3m. This could provide a further boost to its profitability in future years.

While Clinigen has a dividend yield of just 0.5% at the present time, its shareholder payouts are covered nine times by profit. This suggests there could be significant dividend growth ahead for the business. As it matures as a company, a greater proportion of profit is likely to be returned to its investors. This could not only boost income returns, but also signal confidence in the company’s outlook, thereby providing a strong total return in future years.

Growth potential

Also offering high dividend growth prospects is Clipper Logistics (LSE: CLG). The company’s two segments, value-added logistics and commercial vehicles, could offer upbeat earnings growth potential. In fact, the business is forecast to record a rise in its bottom line of 31% in the current year, followed by further growth of 21% next year.

Despite this positive outlook, it trades on a price-to-earnings growth (PEG) ratio of just 1. This suggests that its shares could move higher after their 7% rise in the last six months. And with the company having an excellent track record of profit growth following three years of consecutive double-digit growth, it may be worthy of a much higher valuation premium.

With Clipper Logistics having a dividend yield of 2.2%, it may not appear to be an attractive income play at the present time. However, dividend payments are expected to rise by 18% next year and even then, they are due to be covered almost twice by profit. This suggests that further double-digit dividend growth could be ahead for the company’s investors.

The post 2 dividend growth stocks that could be millionaire-makers appeared first on The Twelfth Magpie.

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Peter Stephens owns shares in Clinigen. The Motley Fool UK has recommended Clinigen. 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.

Clinigen Group (LSE: CLIN) is one of the biggest companies with an AIM listing, with a market cap of £1.3bn. Despite the AIM link, it’s a profitable, dividend-paying company with sound finances.

The group provides a range of specialist pharmaceutical products and services. These include sourcing and managing medicines for use in clinical trials, and supplying unlicensed and pre-approval medicines to hospitals for use in urgent cases. The company also has its own portfolio of niche medicines for rare or life-threatening diseases.

Rapid growth

This is a specialist business which needs expert management. But the group’s sales have grown from £35m in 2011 to £339m last year. Profits have also risen rapidly, growing by an average of 25% per year since 2011.

The group’s growth is the result of a mix of organic rises and acquisitions. Today saw the firm announce its latest acquisition. It will buy Quantum Pharma (LSE: QP) in a £150m cash and share deal which values the smaller company at 82p per share.

Quantum operates in a similar area to Clinigen, developing and supplying unlicensed and specialist medicines to UK pharmacies. Management expects to be able to deliver “immediate financial benefits” and says that there is “a sound cultural fit” between the two businesses.

My calculations suggest that Quantum should add around 12% to Clinigen’s earnings per share over the next year, before any cost savings. That puts Clinigen shares on a forecast P/E of 20. I think that’s reasonable, given the group’s track record of growth. I’d remain a buyer at current levels.

Taking the long view on Sirius

Short-term stock traders with good timing were able to double their money on Sirius Minerals (LSE: SXX) between April and June. But the shares have fallen by 24% since peaking in June.

Is this a buying opportunity for long-term investors wanting a stake in one of the UK’s largest ever mining projects? Let’s take a look.

Even by the standards of the mining industry, Sirius is a long-term project. The group doesn’t expect to start any production until late 2021, and isn’t expected to reach its initial production target until 2024.

Figures used by the firm’s management suggest that the mine has a net present value (NPV) of $15.4bn. This figure represents the value today of expected future cash flows from the mine, using current commodity prices over an expected 50-year lifespan. The production level used in these calculations is 20m tonnes per annum, twice the 10Mtpa level targeted for 2024.

In other words, there’s an awful lot of guesswork involved in calculating these figures, which reflect expected earnings over five decades.

At this stage, I don’t think we have any way of knowing how much of a commercial success this business will be. But at 25p per share, Sirius has a market cap of £1.2bn ($1.5bn). In my view, this isn’t cheap enough to reflect the risks facing equity investors.

I suspect there will be better buying opportunities in the future, when the mine is closer to completion, and offers greater visibility of likely earnings. I’d invest elsewhere until then.

The post One bargain growth stock I’d buy ahead of Sirius Minerals plc appeared first on The Twelfth Magpie.

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• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended Clinigen. 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.

Investing is a tough game. It isn’t a science and there’s no formula that will reliably reel in the cash every time. Guru Peter Lynch explains: “In this business, if you’re good, you’re right six times out of 10. You’re never going to be right nine times out of 10.”

Luck plays a large role in investing and all we investors can do is stack the deck in our favour. This uncertainty places the investor under very relatable stress and it can be hard to prevent our emotional responses from destroying our hard-earned savings. 

For example, we’re trained to seek out dirt-cheap stocks on low P/Es, but counter-intuitively, this could be a terrible mistake because the most successful stocks hit new highs day after day.

Shares in Britvic (LSE: BVIC) and Clinigen (LSE: CLIN) are both around 52-week highs, but I believe they could be great long-term investments at today’s prices. 

Britvic is still fizzing

Britivic’s strong brands, including Robinsons and Tango, have carried the shares 140% higher over the last five years. Shareholders have collected healthy dividends along the way too and the shares currently offer a yield of 3.3%. The company has thrashed the market recently and I believe it can continue to do so despite the shares sitting at a 52-week high.  

The company’s proven ability to increase both price and the volume of beverages sold could continue to be a very potent combination in the long run. The company increased volumes by a solid 2.3% and the average realised price of these sales jumped 2.9%. In total, revenue grew 6.5% in Q3. That figure falls to 4.3% if you ignore the acquisition of Brazilian Bela Ischia back in March. 

The company’s margins have fallen a little recently, but this is largely due to exceptional costs relating to the aforementioned acquisition and the company’s ongoing cost reduction programme. The shares trade on a PE of 17, a fair price for a wonderful business. I don’t expect Britvic to lose its pop anytime soon. 

Clinigen can cope with debt burden

Clinigen’s full-year trading update detailed a company at the top of its game. Revenues grew around 7% and as a result gross profit jumped an impressive 22%. The company provides comparator medicines to clinical trials, acquires neglected treatments and revitalises them, and also helps patients get their hands on potentially life-saving pre-licensed or unlicensed drugs.

Recent strong performance saw the company reduce net debt from £70.9m in December 2016 to £35m in July although it is set to pay a roughly-£40m deferred consideration in October for a past acquisition. The company has also submitted an indicative proposal regarding a possible offer for Quantum Pharma, so this could see debt rise further. 

Investors should keep an eye on the debt pile, but I believe sector tailwinds like ageing populations, a rapid increase in the number of drug trials in action at any given time, and increasing concerns about counterfeit drugs, along with Clinigen’s unique understanding of regulatory framework and expertise in gathering real-world data, could be a recipe for success. 

The post 2 stocks at 52-week highs that could still be worth buying appeared first on The Twelfth Magpie.

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Zach Coffell has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Britvic. The Motley Fool UK has recommended Clinigen. 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

The trading update didn’t disclose any hard financial data except for a 22% year-on-year (y/y) rise in gross profit, which is the best way to measure top-line growth. However, with adjusted earnings per share rising 34% y/y in H1 to 19p, it’s almost inconceivable that full-year profits didn’t match the 16% rise analysts pencilled in for the period.

Management has achieved this stellar growth through acquisitions and solid organic expansion across all of its three main divisions; clinical testing services, unlicensed medicines, and licensed medicines. What attracts me to its business model is that rather than undertaking expensive, time-consuming and a hit-or-miss process of designing drugs from the ground up, Clinigen simply signs agreements with pharma firms to manage access to their drugs for hospitals and physicians across the globe.

And Clinigen has built itself into the leader in the niche market for access to unlicensed drugs, which is a huge and completely legal market across the globe. This segment accounted for 42% of gross profit in 2017 and is experiencing strong growth, especially in Asia and Africa where doctors need access to off-label pharmaceuticals but need to ensure their reliability and safety.

An added benefit of this business model is that it is highly profitable. In H1 the company reported £30m in EBITDA off of £59.1m in gross profit. This ratio should only improve as acquisitions are integrated and SG&A as a proportion of sales falls. With a market-leading position, bumper cash flow and only £35m in net debt, I’m very interested in Clinigen shares today at their valuation of 23 times forward earnings.

Building a strong base for future growth

Another niche business performing very well is lightweight foam manufacturer Zotefoams (LSE: ZTF). Shares of the £134m market cap firm have risen 16% over the past year as the company has sold more of its specialist product for everything from the soles of running shoes to protecting critical products during shipping and military aeroplane ejector seats.

In the quarter to March, the company’s global sales rose 16% y/y when stripping out the positive effects of the weak pound, which shows just how popular its new high performance designs have proven with customers. Looking ahead, there is plenty of potential for growth as markets outside the US, UK and Europe still only account for roughly a quarter of group sales. A new factory in the US is also set to come on-line in Q3 and will raise global production capacity by a full 20%.

Even after paying for this new factory, the company is still in a great position financially as well, with net debt at year-end of just £12.56m. Operating margins last year rose to 13.3% and as the business scales up there’s plenty of growth potential here as well. At 20 times forward earnings and with high growth potential and strong competitive advantages, I see Zotefoams as very attractively priced.

The post 2 overlooked rapidly rising growth stocks I’d buy today appeared first on The Twelfth Magpie.

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• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
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• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Ian Pierce has no position in any shares mentioned.The Motley Fool UK has recommended Clinigen. 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.

This is despite Clinigen announcing in a reassuring AGM statement on Friday that “trading for the current financial year remains in line with the board’s expectations.”

However, the company — which sells and distributes pharmaceutical products — still remains within spitting distance of October’s record tops above 780p per share. And I reckon investors should expect fresh peaks sooner rather than later.

Strong statement

The medical giant has a brilliant record of generating double-digit earnings rises, and the City does not expect this trend to cease during any time soon. Indeed, growth of 18% is forecast for the year to June 2017, resulting in a P/E rating of 17.4 times.

While this may sail above the benchmark of 15 times that is widely considered attractive value, Clinigen still appears conventionally cheap relative to its earnings momentum — the pharma star’s PEG ratio stands bang on the ‘bargain’ standard of 1 times.

And those seeking tearaway dividend growth will also be drawn in by current dividend forecasts. Clinigen is anticipated to pay a 4.7p per share reward in fiscal 2017, up from 4p last year.

Sure, this reading also creates a low yield of 0.7%, a currently paltry reading when tallied up against the FTSE 100 forward average of 3.5%, for example. But I reckon the firm’s splendid earnings potential should create bumper income flows in the longer term.

Sparky acquisitions, like Asia, Africa and Australasia-focussed Link Healthcare in 2015, are providing Clinigen’s sales outlook with a significant shot in the arm.

And the company has plenty of ammunition to make further shrewd acquisitions and expand its geographical footprint — just last month the company also opened its first office in Japan, giving it access to another major medicines market.

As broker Numis notes, four-fifths of the world’s population — across both developed and emerging economies — do not have access to specialist medicines, while the huge counterfeit market is an added problem. These structural problems leave Clinigen in the box seat to print solid sales growth, in my opinion, particularly as global healthcare investment heads higher.

Risky business

Value hunters seeking exposure to the pharmaceuticals sector are likely to be more interested by the likes of AstraZeneca (LSE: AZN), however.

For fiscal 2017 the Cambridge business sports a P/E rating of 13.3 times. And a predicted dividend of 280 US cents per share yields a market-beating 5.1%.

AstraZeneca has made tremendous strides in revamping its threadbare product pipeline in recent times, and new products like Brilinta are flying off the shelves — indeed, the drugs giant saw sales of this product alone leap 22% during the third quarter, to $208m.

But of course drugs development is never an exact science, and failures in the lab can have vast financial repercussions in the form of lost revenues and increased R&D costs. At the same time AstraZeneca is also battling against generic competition to its established sales drivers like Crestor, and this issue caused group revenues to dip 4% between July and September, to $5.7bn.

I believe that AstraZeneca has both the know-how and financial clout to overcome these troubles and generate brilliant earnings growth in the years ahead. However, those seeking less risky access to the pharmaceuticals segment may wish to take a serious look at Clinigen instead.

The post Clinigen Group plc vs AstraZeneca plc: which is the hotter healthcare stock? appeared first on The Twelfth Magpie.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended AstraZeneca and Clinigen. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

FDA approval

That’s what awaited Beximco Pharmaceuticals (LSE: BXP) shareholders this morning, with their shares up 20% in early trading to 55p. But that’s only part of the growth story — Beximco shares are up 175% over the past 12 months, and have risen nearly fivefold in the past five years.

So what’s behind it — some revolutionary new discoveries? Actually, no, the Bangladesh-based company does something simpler but profitable — it manufactures generic pharmaceuticals products, which sell in great quantity and at much lower prices than their branded counterparts, and are a boon to much of the developing world.

It’s what happens to a lot of pioneering products invented by the likes of GlaxoSmithKline and AstraZeneca when their patents expire, which is something both giants have been suffering from in recent years, and the drugs end up being made by companies like Beximco and sold cheaply.

Today’s big share price gain is a result of the company receiving a second product approval from America’s FDA, this time for Sotalol Hydrochloride, a generic version of the cardiovascular drug Betapace — and cardiovascular medicine is big business in overfed Western countries. The product should launch in early 2017.

There are no forecasts for Beximco, but even after today’s rise they’re still only on a trailing P/E of 11 based on December 2015 figures. And with a maiden dividend last year yielding 3.9%, we could be looking at one of tomorrow’s cash cows.

A growth star

Back in 2011, speciality drugs and pharmaceutical services firm Clinigen (LSE: CLIN) was top of the Sunday Times Fast Track 100 list, which ranks the country’s fastest growing privately held companies. Clinigen went on to float on the London Stock Exchange in 2012 and since then its track record has been stellar, with a quadrupling of the share price to 742p.

Today the company announced an extension of its partnership with healthcare company BTG, with a new agreement “to manage BTG’s critical care portfolio across the whole of Europe and now into new territories in Asia.“

Chief commercial officer Steve Glass enthused that the deal “demonstrates the value of our unique, synergistic businesses, which enables us to provide safe and ethical access to a medicine throughout its lifecycle – from development to approval, to launch and beyond.“

But after their meteoric rise, are Clinigen shares still worth buying? Since that maiden set of results in 2012, we’ve seen earnings per share soar by 160%, and there’s a further 18% currently being forecast for the year to June 2017. If anything, that seems conservative to me, especially in the light of 2016 results released last month.

Revenue for the year rose by 84%, with adjusted EBITDA up 73%. There was plenty of cash coming in too, with cash flow up 213%, and that fed through to a dividend rise of 18%. Dividend yields are still modest at under 1%, but a progressive policy is lifting them well ahead of inflation every year. There’s a further 19% hike on the cards for the current year, and I see terrific potential for long-term dividend growth here.

The post Two pharmaceuticals tiddlers that could beat the best stocks appeared first on The Twelfth Magpie.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK has recommended AstraZeneca, BTG, and Clinigen. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Looking ahead, the uncertain outlook for the global economy could cause the pace of Next Fifteen’s share price rise to moderate somewhat. US interest rate increases appear very likely over the next year and this could cause investor sentiment towards cyclical stocks such as Next Fifteen to weaken. However, with the company having a sound business model that’s well-diversified, it may be able to continue to deliver upbeat growth numbers in the long run.

Certainly, earnings growth forecasts of 9% this year and 10% next year have huge appeal. And with Next Fifteen trading on a price-to-earnings growth (PEG) ratio of just 1.3, now seems to be an excellent time to buy a slice of it for the long run.

Worth a look

While Next Fifteen has enjoyed a strong year of share price growth, shares in healthcare company Clinigen (LSE: CLIN) have disappointed. That’s because they’ve fallen by 15% during the period despite Clinigen recording three successive years of double-digit growth.

In fact, Clinigen’s earnings per share have risen from 13.4p in 2012 to 28p in 2015. That’s an annualised rise of almost 28% and shows that Clinigen remains a very strong growth play. And with the company forecast to increase its bottom line by 21% in each of the next two years, investor sentiment could begin to pick up over the coming months.

That’s especially the case since Clinigen trades on a PEG ratio of just 0.6, which indicates that the market hasn’t yet begun to price-in its improving financial outlook. And with Clinigen having a beta of just 0.7, its shares could offer a less volatile shareholder experience in the short run. With the potential for increased uncertainty in the coming months, this could prove to be a major ally for the company’s investors.

Waiting game

Meanwhile, Sirius Minerals (LSE: SXX) has recorded a share price rise of 28% since the turn of the year, which brings its five-year capital gain to 100%. Clearly, that’s an impressive return, but Sirius Minerals has been a relatively risky investment during that time, with its success being heavily reliant on the approval of a major potash mine in York.

Although approval for the mine has now been granted, Sirius Minerals remains a relatively high-risk stock to own. It requires vast financing for such a large project and while investor sentiment towards the resources sector has improved of late, the commodity price collapse of recent years could still make fundraising more difficult for the firm.

Due to this, Sirius Minerals may be a stock to watch rather than buy at the moment – especially with a number of other smaller companies offering high growth and low valuations.

The post Are Sirius Minerals plc, Next Fifteen Communications Group plc and Clinigen Group plc the 3 hottest small-cap stocks around? appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Peter Stephens owns shares of Clinigen and Next Fifteen Communications. The Motley Fool UK has recommended Clinigen. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.