What is it with Ireland's healthcare companies? In the past week alone, we've heard that the US giant Medtronic wants to buy Dublin based Covidien for USD 43 billion. On Tuesday it was reported that Citi has been hired by the Irish pharma company, Shire, as it's expecting takeover bids. It raises the question, should we all be investing in Irish pharmaceutical and biotech companies?
Saxo Bank's Head of Equity Strategy, Peter Garnry, says that's certainly what the market seems to be telling you right now. He says this is a trend that could last for years. Many multinationals, notably in the States, view Ireland as a highly favourable tax base as they pay considerably less corporation tax and it's much easier to repatriate cash flows if they were to be based in the Emerald Isle.
On top of that, he says a number of Irish healthcare companies are looking good in their own right. Shire has been one of his top equity picks for weeks as it has good profit margins, valuations, and growth prospects. He also suggests that the Pfizer deal with the UK's AstraZeneca may also be revived soon.