Today I am looking at the investment prospect of five recent FTSE risers.
Shire
Medicines play Shire (LSE: SHP) emerged as the main winner on the FTSE 100 last week thanks to a bubbly testing update, and the business gained a chunky 7% during the period. Shire advised that its dry-eye treatment Lifitegrast had passed both primary and key secondary endpoints, results that the firm said will lead to regulatory resubmission in the US during the first quarter of 2016.
The drug is seen as a critical earnings driver for Shire in the years ahead, and the Dublin business gave its long-term outlook a further boost today after purchasing biotech play Dyax for $5.9bn, boosting Shire’s position in the treatment of rare diseases. Regardless of whether this represents a death knell for the company’s $30bn takeover attempt of Baxalta, I believe Shire’s robust product pipeline should deliver robust long-term returns as global demand for pharmaceuticals rockets.
Bunzl
Support services specialists Bunzl (LSE: BNZL) continued its solid spurt higher between Monday and Friday as shares gained an extra 3%. And the company’s highly-diversified operations — which sees it supply everything from coffee cups to first aid kits and stationery — makes it a solid-if-not-sexy share pick, in my opinion.
Bunzl advised last month that group revenues advanced 4% during July–September thanks to recent acquisitions, and promisingly commented that it has “substantial funding headroom” to make additional deals during the remainder of 2015. With Bunzl dedicated to spreading its global reach far and wide, I fully expect demand for the firm’s essential goods to keep rocketing higher.
Merlin Entertainments
Theme park experts Merlin Entertainments (LSE: MERL) also enjoyed a strong share price up-tick last week, with the business adding 4% during the period. Investor sentiment has been given a boost in recent weeks following news that the rollercoaster specialists is opening a Legoland theme park in Shanghai, in alliance with China Media Capital.
The move is a canny one, significantly boosting its exposure to a fast-growing marketplace through one of the world’s favourite toy brands. Merlin Entertainments also operates a cluster of Madame Tussauds outlets in China, and plans to open a total of three new sites in the country in the next 18 months. I believe the rising popularity of theme parks in both developed and emerging geographies should make Merlin Entertainments a firm winner in the coming years.
Travis Perkins
Building materials play Travis Perkins (LSE: TPK) enjoyed an 0.2% share price bounce between last Monday and Friday — hardly exceptional, but it steadies the ship following a concerning update the previous week. The company’s latest financials advised that full-year earnings will register “at the lower end of market expectations” thanks to a slowing construction sector.
Despite this recent hiccup, in the long term I believe Travis Perkins remains a terrific stock bet as the UK housing crisis pushes the nation’s homebuilders into action. And the Northampton firm’s decision to build another 400 stores during the next four years should cement its place as the go-to supplier for the construction industry, driving sales steadily higher.
Greggs
Thanks to its hugely-successful restructuring drive, I believe sausage roll emporium Greggs (LSE: GRG) is a delicious growth choice for stock pickers. The caterer saw its share value ascend 3% during last week, and I believe Greggs has much further to rise, as demand for its new coffee blends and tasty sandwich ranges gains further momentum.
Greggs advised last month that like-for-like sales jumped 5.6% in the year-to-date, helped by its store re-fit programme, which has seen 158 of its outlets given a polish. On top of this, the business has opened 65 outlets so far in 2015, and the firm is also improving its distribution network to meet the needs of hungry customers. I believe solid doughnut and tea demand, supported by rising consumer spending power, should keep the tills filled at Greggs.