Investors shouldn"t overlook pharmaceutical stocks when building their portfolios, as the former have good prospects in the medium and long term, brokers say. These estimates come after the stock of "Zentiva" (SCD) have risen about 43% since the beginning of the year, and their peers in the sector, "Antibiotice" (ATB) and "Biofarm" (BIO), fell 3.04 %, and gained 0.09%, respectively.
Brokers say that the evolution of the stocks in question is due to the good financial results posted for the year 2010.
According to Nicu Grigoraş, broker at Intercapital Invest, the three companies listed on the BSE felt the effects of the crisis to a lesser extent than the other sectors of the market. He said that the companies were only affected in when it comes to their profitability and to prices of their stock.
As for their future, experts remain optimistic. According to Nicu Grigoraş, "the estimates for the next quarters are positive and as a result, issuers in the pharma sector should be considered when setting up a portfolio in this period". Also, Mihai Chişu, broker at "IFB Finwest" considers that the market still has major potential in the short and long term.
Some of the factors that could have an effect on the performance of pharma companies include the reduction of the number of subsidized drugs as well as the difficulty in gaining access to new drugs.
However, Simion Tihon, broker at Prime Transaction, considers that the reduction in the number of subsidized drugs as a result of the budget cuts won"t have a definitive effect on the evolution of the shares of pharmaceutical companies.
Drug makers could make more money by selling new or innovative drugs. Unfortunately, access to new types of drugs is very low compared to the European average.
* "Zentiva" pays out a dividend of 0.3 lei/share
Zentiva ended last year with a