AIM for Growth

In today’s blog I look at the investment case for Smith and Nephew, a FTSE 100 pharmaceutical giant with a market cap of £14,730 million. Since 2015 the stock has returned over 90% and continues to look attractive going forward. It may not provide the super growth that AIM stocks could potential deliver, but it does provide diversification for your portfolio to balance out risk of investing in small- and mid-cap companies. DEMAND The company has three sectors that it specialises in which are orthopaedics, sports medicine and advanced wound treatment. For example, this includes equipment used in operations for knee replacements and rotator cuff repair. The demand for these business sectors should continue to grow regardless of UK economic conditions, as healthcare is of increasing importance. This is supported by the global trend which can be seen in developing countries such as the US, Smith and Nephew’s highest market by revenue, are moving towards an aging p...

A stock that I have owned for the last few years is banking conglomerate HSBC, which operates in 67 countries worldwide with Asia its largest market accounting for 45% of total revenue. The bank has over $2,500 billion assets under management globally and is the seventh largest in the world, generating reported revenue in 2018 at $53 million. The bank also delivers a strong yield of 6% that provides a good source of income generation for an investor’s portfolio.  ASIA As mentioned, the business generates 45% of total revenue from Asia, providing geographical diversification for investors versus UK-focused FTSE banks such as Barclays and Lloyds. Due to the global presence of the bank, the stock offers defensive qualities to investors. Positive economic growth is also occurring in the Asia Pacific region with disposable income rising which should relate to people having more funds available to invest or save, resulting in an increase in demand for banking and investment service...