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Drug Industry Analysis

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Drug Industry Investment Analysis
Introduction
The Drug industry has registered positive financial performance in the third quarter of 2014 having registered tremendous profits. The share prices of companies within the drug industry registered good stock price performances in the stock exchanges topping the 5% level over a 3 month period having surpassed the S&P 500 Index (+1%) and the Dow Jones Industrial Average (+1%). The substantial increase of 15% per annum in this industry is a positive indication of the good performance, even though the performance would not be able to surpass the robust gains of +35% posted in 2013. The industry has been plagued by a series of scandals ranging from tax inversion deals especially in companies within the pharmaceutical sector. Tax inversion deals take place when a company registers as a subsidiary of a new holding company in a different tax regime so as to enjoy beneficial tax laws. The investment opportunities available in the drugs industry are tremendous. The industry offers a wider base for the investment of 3%+ yielding equities that can offer financial strength and a high degree of safety.
The drug industry does not fall in the upper half of the best performing sectors. A majority of the companies within the drug industry are ranked as average, these are companies like GlaxoSmithKline, Merck and Pfizer. Other companies that are ranked below the average industry standard include AstraZeneca, Novartis and Eli Lilly. The companies that are ranked in the top half of the best performing sectors include Actavis and Valeant. This is an important factor for investment purposes as good financial performance drives the investment opportunities within the best performing industries. However, despite the turbulent factors within the industry, the industry has gone through a significant transformation offering a safe,

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