# GlaxoSmithKline GSK



## Pano (Oct 16, 2012)

Has dropped quite a bit in the past two days. I think due to corruption issues in Algeria.

Good entry point?


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## warp (Sep 4, 2010)

Pano said:


> Has dropped quite a bit in the past two days. I think due to corruption issues in Algeria.
> 
> Good entry point?


Actually Glaxo dropped because of an earnings miss, and possibly lowered expectations going forward this year.

I already own it, and will add to it next week...just seeing where the price stabilizes.

This is a long term hold...and collect the nice 5%+ dividend, which , because its a UK company has no withholding taxes, which is a bonus.
Remember though that you have no dividend tax credit with GSK...the divs are considered regular income, like interest , if held in a cash account.


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## w0nger (Mar 15, 2010)

How do you buy GSK? on the LSE or via the US ADR?


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## MrMatt (Dec 21, 2011)

Now GSK or JNJ?
I want both, but can only afford one, leaning to GSK, but no real reason why.


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## warp (Sep 4, 2010)

w0nger said:


> How do you buy GSK? on the LSE or via the US ADR?



You can easily buy it in New York as an ADR.

I just added to my position today. It's another long term hold for us.

Mr Matt:
I own both JNJ and GSK....GSK pays a better dividend, and there are no taxes withheld .......with JNJ, if you buy it in a cash account, there will be a 15% US withholding tax on your dividend.

Nobody can say for sure which will do better going forward.


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## MrMatt (Dec 21, 2011)

warp said:


> Mr Matt:
> I own both JNJ and GSK....GSK pays a better dividend, and there are no taxes withheld .......with JNJ, if you buy it in a cash account, there will be a 15% US withholding tax on your dividend.
> 
> Nobody can say for sure which will do better going forward.


RRSP so 0% withholding in either case. I know they're both great companies and likely do continue to do quite well going forward.
Which is why it is so hard to choose.


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## londoncalling (Sep 17, 2011)

Why choose? buy both. I am underweight pharma and have orders in on both.


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## MrMatt (Dec 21, 2011)

londoncalling said:


> Why choose? buy both. I am underweight pharma and have orders in on both.


Why choose? I only have enough free cash to add 1 position, and it would be a small one at that.


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## londoncalling (Sep 17, 2011)

Fair enough. I missed my gsk order today by a penny :upset:. Replaced the order at a lower price for next week may get there after it goes Ex Div. Maybe 47.51 will be the floor on this and I will miss my chance.


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## londoncalling (Sep 17, 2011)

Changed my mind and got my order filled @47.51 today. Needed to increase pharma exposure and diversify outside of Canada. This seemed a good fit. Missed the dividend but got in just in time for a market correction :cower:.

Cheers


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## gibor365 (Apr 1, 2011)

Aren't you worried about GSK Total Debt/Equity 2.88? For comparisson JNJ is 0.22
Also checked breaking news about GSK... not too encouraging
FBI questioning Glaxo employees
o	The FBI has been interviewing current and former GlaxoSmithKline (NYSE:GSK) employees in connection with bribery allegations made against the drug maker in China, the WSJ reports.
o	Additional reports continue to surface on corrupt Glaxo practices in many other countries, with Syria being the most recent case - reported last week.
o	The SEC and the U.K.'s Serious Fraud Office are also conducting investigations into possible criminal violations of the company's commercial practices.

•	Glaxo bribery claims stretch to Syria
o	GlaxoSmithKline (NYSE:GSK) is now facing corruption claims in Syria, where it's has been accused of bribery to secure business.
o	The drugmaker is investigating the claims which date back to 2010 after a whistleblower's email was sent to the company.
o	Syria is now the sixth country to be investigated by Glaxo for smaller-scale bribery claims compared to the $480M Chinese allegations which have plagued the company since last July.


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## humble_pie (Jun 7, 2009)

gibor said:


> Also checked breaking news about GSK... not too encouraging
> FBI questioning Glaxo employees
> o	The FBI has been interviewing current and former GlaxoSmithKline (NYSE:GSK) employees in connection with bribery allegations made against the drug maker in China, the WSJ reports.
> o	Additional reports continue to surface on corrupt Glaxo practices in many other countries, with Syria being the most recent case - reported last week.
> ...



the worldwide cloud of corruption charges currently hanging over glaxo is the key negative imho, not any particular earnings release.

interestingly, there may be an indirect link to valeant, another pharma whose share price is falling, although for entirely different reasons.


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## My Own Advisor (Sep 24, 2012)

So no withholding taxes with GSK in RRSP? Just like JNJ, KO and other blue-chippers?

I'm also underweight in pharma and medical device companies.


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## PuckiTwo (Oct 26, 2011)

I have no exposure to Medical either. Initiated a small position last week at 47.54. Looks like it's further dropping.


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## MrMatt (Dec 21, 2011)

I got some JNJ, now to save up a bit more cash for GSK, and the others on my list.


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## humble_pie (Jun 7, 2009)

My Own Advisor said:


> So no withholding taxes with GSK in RRSP? Just like JNJ, KO and other blue-chippers?
> 
> I'm also underweight in pharma and medical device companies.




gosh, this point has been discussed so many times ... in fact research contributed by many members here in cmf has driven discussion of british ADRs to a fine point of excellence ...

there are no withholding taxes for british companies in any kind of canadian account.

even when the overseas brit is held as a US ADR, the forum has been able to establish that most brokers will not impose any kind of NR withholding tax. It's possible that smaller privately owned brokers running on custom-built mainframes may make mistakes in this respect; however the big bank-owned brokers appear to distribute british ADR dividends sans foreign NR tax.

this absence of withholding tax makes british ADRs denominated in US dollars appealing candidates for any TFSA that has grown large enough to think about currency diversification & global diversification.

the drawback in a non-registered account is that british dividends are foreign income that will be taxed at 100%, so if one has a choice one would tend to hold them in a registered account.

although my own pov is that glaxo is a brit to avoid since the bottom of the present scandal is not even in sight yet.

here's a list of british ADRs. As you can see the list is wonderfully long so there are plenty of choices.

http://topforeignstocks.com/


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## MrMatt (Dec 21, 2011)

humble_pie,
Your link is broken.

British companies can give some good global exposure, just like many large US based companies.


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## My Own Advisor (Sep 24, 2012)

Thanks Humble,

I didn't mean to beat a dead horse, just confirming what I thought: British ADRs = no withholding taxes in RRSP.

I did not know however, british ADRs have no withholding taxes whatsoever in any Canadian account. This makes them a candidate in an U.S. $$ TFSA for me.

Like U.S. stocks, foreign income is taxed at the highest rate so I wouldn't hold U.S. stocks or ETFs or British ADRs for that matter in a non-registered account. If investors do, they have to worry about foreign income reporting as well at tax-time if >$100k held.


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## mrPPincer (Nov 21, 2011)

Here's the direct link to the full list of British ADRs (humble pie's link was to the front page of the same site)
http://topforeignstocks.com/foreign-adrs-list/the-full-list-of-british-adrs/


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## humble_pie (Jun 7, 2009)

the link to topforeignstocks dot com works fine for me in both IE & chrome. 

also (for mrMatt) there was a fine point being expressed re british ADRs for TFSAs. British dividends are not subject to NR withholding tax in TFSAs, thus they offer a somewhat rare tax-free avenue in US dollars in TFSAs.

by contrast, US stocks *will* be subject to NR withholding when held in TFSAs.


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## humble_pie (Jun 7, 2009)

My Own Advisor said:


> 1) I did not know however, british ADRs have no withholding taxes whatsoever in any Canadian account. This makes them a candidate in an U.S. $$ TFSA for me.
> 
> 2) Like U.S. stocks, foreign income is taxed at the highest rate so I wouldn't hold U.S. stocks or ETFs or British ADRs for that matter in a non-registered account. If investors do, they have to worry about foreign income reporting as well at tax-time if >$100k held.



1) exactly

2) i thought the foreign investments criterion was $100k in capital? all foreign income in any amount in non-registered accounts has to be reported, but the requirement to report existence & location of foreign capital exceeding $100k in the aggregate is what's new, je pense.


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## My Own Advisor (Sep 24, 2012)

Thanks HP!


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## londoncalling (Sep 17, 2011)

gibor said:


> Aren't you worried about GSK Total Debt/Equity 2.88? For comparisson JNJ is 0.22
> Also checked breaking news about GSK... not too encouraging
> FBI questioning Glaxo employees
> o	The FBI has been interviewing current and former GlaxoSmithKline (NYSE:GSK) employees in connection with bribery allegations made against the drug maker in China, the WSJ reports.
> ...


I knew about all this going in but thanks for posting for others who may not be aware. I see the current status as not much different than SNC a few years ago. Business in emerging markets is full of corruption as you may already know. I may be a little early to the table but I only took a half position. If it recovers I can let it ride. If it continues to drop I can average down. It broke resistance on close today so that is a bad short term signal. Again, a reminder for my need to be patient. I have done this with others (ex. CCO and POT)
I tend to get an itch every so often and if the stock is at 52 week lows I mitigate my downside on long term holds. For me it is better to do that than chase momentum. I can sit back and get the divvy till the dust settles. Long term hold for me. Cheers


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## Nemo2 (Mar 1, 2012)

http://www.reuters.com/article/2014...companyNews&feedType=RSS&feedName=companyNews



> A clinical trial of an experimental vaccine against the deadly Ebola virus is set to start shortly, according to British drugmaker GlaxoSmithKline , which is co-developing the product with U.S. scientists.


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## Toronto.gal (Jan 8, 2010)

^ An investigational drug - TKM-Ebola [not vaccine], in phase 1, is also being developed by a Canadian company [TKM], also co-developed with US, rose 47% on Friday on the news last Thursday, that the FDA had given it a verbal partial clinical hold modification [from previous full clinical hold due to safety concerns]. The partial hold simply means that the drug can potentially be tested on people already infected by the virus.

To my knowledge, there are at least 3 other companies with same new drugs in early clinical phase. One of those experimental drugs was thought to have saved an American doctor.
http://www.cnn.com/2014/08/04/health/experimental-ebola-serum/

Definitely you can hear the urgency. Now, if only the FDA would give same 'partial hold' to other highly experimental drugs for patients that are near death anyway.


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