AstraZeneca (AZN) 2012 Review

AstraZeneca PLC develops and markets prescription drugs for cardiovascular (Crestor, Seloken/Toprol, Atacand), gastrointestinal (Nexium), infection, neuroscience, oncology and inflammatory (Synagis, Symbicort) diseases world wide.  The company has grown its profits and dividend at a 13-17% rate over the last 10 years earning a 25%+ return on equity.  It has raised its dividend every year for the last 20 years. Despite tough conditions in recent recession, management negotiated this period with barely a hiccup and set the company on a course to continue to grow earnings by:

(1) Strong position in cardiovascular market [Crestor, Brilinta],

(2) increased penetration in emerging markets,

(3) acquisitions [most recent Ardea Bioscience],

(4) major cost reduction program.

Negatives:

(1)        a number of its drugs are facing generic competition,

(2)        intense competition,

(3)        several R&D setbacks.

AZN is rated B++ by Value Line, has a 29% debt to equity ratio and its stock yields 6.3%. 

Statistical Summary

                 Stock      Dividend         Payout      # Increases   

                Yield      Growth Rate     Ratio       Since 2002

AZN            6.3%           8%            48%             9

Ind Ave       3.3               8               43              NA  

                 Debt/                        EPS Down       Net        Value Line

                 Equity         ROE      Since 2002      Margin       Rating

AZN          29%            36%            2                 30%           B++

Ind Ave     14               16              NA                19              NA

     Chart

            Note: AZN made good initial progress off its March 2009 low, quickly surpassing the downtrend off its October 2006 high (red line) and the November 2008 trading high (green line).  Long term, AZN is in an uptrend (straight blue lines). Intermediate term, it is in a trading range (purple lines).  The wiggly blue lines are Bollinger Bands.  The Dividend Growth Portfolio does not own AZN.  The upper boundary of its Buy Value Range is $33; the lower boundary of its Sell Half Range is $51. 

http://finance.yahoo.com/q?s=AZN

9/12

Steve Cook received his education in investments from Harvard, where he earned an MBA, New York University, where he did post graduate work in economics and financial analysis and the CFA Institute, where he earned the Chartered Financial Analysts designation in 1973. His 40 years of investment experience includes institutional portfolio management at Scudder, Stevens and Clark and Bear Stearns. Steve's goal at Strategic Stock Investments is to help other investors build wealth and benefit from the investing lessons he learned the hard way.