In December, I boldly hailed GlaxoSmithKline (LSE: GSK) (NYSE: GSK.US) as the one stock I would buy for 2015.
I had been singing its praises since last Octoberwhen it was trading at 12 times earnings, which is cheap for Glaxo.
By December, the share price had pickedup 13% from its mid-October lows. But I reckoned there was more to come, and so farIve been proved right.
Glaxos share price is up another 18% so far this calendar year, which for a long-term income play like this oneis rather juicy growth.
I thought Glaxo was a great buy in October, a good buy in December. But is it a buy at all at todays price?
Go Glaxo!
I singled Glaxo out of the FTSE 100 because I hoped the worst of the Chinese bribery scandal was over, and it would be able to reverse falling US sales, which caused almost as much damage to the share price.
Glaxos 1 billion restructuring programme, new lung treatments, encouraging early Ebola vaccine trials, emerging markets sales growth and blossomingViiV Healthcare businesses all looked promising to me.
I reasoned that you dont get many opportunities to buy a top stock like Glaxo at a reduced price, and this opportunity shouldnt be missed.
Poor Results
Yet while the share price growth figure vindicates my faith, Glaxos full-year results, published last month, probably dont.
Annual revenues declined 3% to 23bn, hit by currency headwinds to a degree, but also weak sales of respiratory drug Advair. Turnover fell a worrying 10%, even at constant currency rates.
Earnings per share were just 95.4p, against the 120p markets had predicted one year earlier. Yet still the stock has risen.
Pipe Up
There was some positive news in there, as Glaxosplan to create a new consumer healthcare business with Novartis is still on course for completion in the first half of this year, and could trigger 4bn of shareholder returns.
The big question remainswhether Glaxo can replenish its drugs pipeline, to keep up with patent expiries. Management isconfident, but there is a long way to go.
Trading at a more familiar valuation of 17.1 times earnings and yielding 4.91%, the once-in-a-blue-moon Glaxo buying opportunity has passed.
It still deserves a place in your portfolio, but I no longerfeel the need to make a big noise about it. My work here is done.
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Harvey Jones has no position in any shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.