Can GlaxoSmithKline Get Past Recent Headlines?
With shares of GlaxoSmithKline (NYSE:GSK) trading around $52, is GSK an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework.
T = Trends for a Stock’s Movement
GlaxoSmithKline is global health care group engaged in the discovery, development, manufacturing, and marketing of pharmaceutical products. These products are vaccines, over-the-counter medicines, and health-related consumer products. GlaxoSmithKline’s principal pharmaceutical products include medicines in these areas: respiratory, antivirals, central nervous system, cardiovascular and urogenital, metabolic, antibacterials, oncology and emesis, dermatology, rare diseases, immuno-inflammation, vaccines, and HIV.
GlaxoSmithKline had previously apologized for bribery practices in its Chinese operations and blamed the acts on a few employees in the company’s China business. Now, Chinese state media are saying the practice was orchestrated by the British company and was not the work of a few employees, Reuters reports. Some detained GSK executives in the country said that the company set sales goals that would be impossible to fulfill without the use of bribery. So far, GSK officials have not commented on the accusations.
T = Technicals on the Stock Chart Are Strong
GlaxoSmithKline stock has moved higher in recent months. The stock is now consolidating slightly below highs for the year, but the company may need time before it makes its next move. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, GlaxoSmithKline is trading around its rising key averages, which signals neutral to bullish price action in the near term.