UK stock investing: the best FTSE 100 growth share to buy now

This FTSE 100 growth stock could be a potential acquisition for investors looking at UK stock investing opportunities today.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

UK stock investing can be a challenging pastime, especially when it comes to finding growth shares. Indeed, investing in growth stocks can be incredibly risky because trying to forecast how a company will perform in the next few years is virtually impossible. That’s not just limited to growth shares. It’s the same with all investments. However, by focusing on blue-chip FTSE 100 stocks, I believe it’s possible to reduce the risk of investing in growth shares.

These large multi-billion-pound companies tend to have more checks and balances in place than smaller firms, which means the risk of something going wrong is significantly reduced. However, it’s always going to be impossible to eliminate the threat.

With that in mind, here’s one FTSE 100 growth share I’m considering adding to my portfolio today. 

UK stock investing opportunity

Hikma Pharmaceuticals (LSE: HIK) is, in my opinion, one of London’s hidden growth stars. The FTSE 100 company is one of the largest producers of generic medicines around the world.

These products are vital for healthcare systems worldwide as, without them, treating patients would cost significantly more. When a drug is first launched, it’s protected by a patent for several years. This allows its producer to recoup the development costs and earn a profit.

However, other producers, like Hikma, can jump into the market when the drug comes off-patent. It can manufacture and sell treatments for much less than the branded version. In some cases, the discount is 70% or more. This is a huge business, and it’s only likely to grow.

But Hikma is always developing new products. It also produced some of the essential drugs used to treat coronavirus patients. Hikma is one of the primary producers of dexamethasone used to treat patients hospitalised with Covid-19. This helped the company to a 6% increase in revenues for 2020. Operating profit jumped 17% to $566m. 

FTSE 100 growth 

Of course, operating a business that’s based around the idea of generic versions of others’ products has significant risks. The company is always fighting legal battles, and this is just an extra cost of doing business.

It’s also suffered several setbacks whereby regulators have prevented its generic version of a branded product from coming to market. Significant legal battles and substantial product setbacks have impacted the company’s stock price in the past. As long as the corporation is in the business of generic pharmaceuticals, this will continue. 

Despite these risks, I’d buy the FTSE 100 growth stock for my portfolio today. Healthcare is a growing market. I don’t think that’s going to change.

What’s more, affordable healthcare is an increasing issue worldwide, and Hikma is one company policymakers can rely on to produce treatments at affordable prices. However, this could become a risk if those policymakers move in another direction.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Hikma Pharmaceuticals. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »

Investing Articles

Are HSBC shares a FTSE bargain? Here’s what the charts say!

There are plenty of dirt-cheap FTSE 100 banking stocks for investors to choose from today. Our writer Royston Wild believes…

Read more »