Tag Archives: Pascal Soriot

Business, Finance, Occupation & Industry

Why GlaxoSmithKline Beats AstraZeneca and Shire

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By Alan Oscroft, The Motley Fool

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LONDON — After offering my pick of our telecom companies last week, today I’m turning my attention to the FTSE 100 Pharmaceuticals and Biotechnology sector. This time there are three companies that make the top flight — GlaxoSmithKline  , AstraZeneca  and Shire .

I’ll start with a few fundamentals:

Company GlaxoSmithKline AstraZeneca Shire
Market cap 76.9 billion pounds 41.5 billion pounds 10.9 billion pounds
Share price 1,576 pence 3,308 pence 1,992 pence
Share price growth 13% 19% -1.3%
Historic EPS growth -1% -12% -14%
Forward EPS growth 2% -18% 68%
Historic P/E 11.8 7.0 21.6
Forward P/E 13.5 9.6 13.3
Historic Dividend 5.5% 6.3% 0.6%
Historic Cover 1.5x 2.3x 7.7x
Forward Dividend 5.1% 5.5% 0.6%
Forward Cover 1.5x 1.9x 11.8x

Share price growth is over the past 12 months, historic figures are for December 2012, forward figures are based on December 2013 forecasts.

Shire
I’m going to reject Shire, for a couple of reasons. Firstly, it isn’t paying any meaningful dividends yet, and if I’m considering investing in top FTSE 100 shares, I want to see mature companies offering decent annual income.

Shire also seems a little too specialized to me, with a large proportion of its annual turnover coming from just a couple of relatively minor therapeutic areas.

The giants
That brings me to the battle of the giants, and at the moment I can see only one winner. AstraZeneca has been suffering falling earnings in recent years, largely because of the famous “patent cliff” of losing intellectual protection for some of its blockbuster drugs, and increasing competition from generic drug manufacturers.

AstraZeneca has also lagged GlaxoSmithKline in expanding into new areas of biotechnology, with its acquisition record not being a glowing success.

Last month, AstraZeneca announced a new strategy for returning to growth, and the firm’s new chief executive, Pascal Soriot, does seem to be the sort of person to get things done. But to me, I thought the announcement lacked meat, and there were too many marketing buzz phrases in it — “building a culture,” “leveraging business development,” “exploiting our unique combination of strengths,” “maximizing the potential,” and so on. The plan to expand more into specialty care products and to concentrate mainstream research on core areas sound concrete, but overall I thought I was reading “More of the same, only better.”

The winner
My pick, obviously, is GlaxoSmithKline — and I already have it in the Fool’s Beginners’ Portfolio. Back in June, I reckoned Glaxo had been preparing for the blockbuster drugs pipeline crunch better, and had been more successful in biotechnology expansion and acquisition.

Earnings forecasts, albeit short term, are better — there’s a 9% growth in earnings per share forecast for 2014, with AstraZeneca’s still expected to be falling. And though the shares are on a higher P/E multiple, I think that rightly reflects a greater level of confidence in Glaxo’s future.

Finally, if you’re looking for investments that should take you all the way to a comfortable retirement, I recommend the Fool’s special new report detailing five blue-chip shares. They’ll be familiar names to many, and they’ve already provided investors with decades of profits.

But the report will only be available for a limited period, so click here to get your hands on these great ideas — they could set you on the

From: http://www.dailyfinance.com/2013/04/12/why-glaxosmithkline-beats-astrazeneca-and-shire/

Business, Finance, Occupation & Industry

5 FTSE 100 Shares You Should Have Bought in March

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By Alan Oscroft, The Motley Fool

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LONDON — It’s easy to look back on the past month and pick the biggest risers. But it’s a bit harder to decide which ones might have further to go, especially when we’re looking at closely followed FTSE 100 shares.

But here’s my pick of five March winners which I think could still have further shareholder value yet to be realized:

Vodafone
How often do 92 billion pound giants enjoy double-digit growth in just a month? Vodafone Group  did during March, as its shares soared 20.5 pence (12.4%) to 186 pence. The shares had fallen during the tail-end of 2012, but they’re now up 20% since the start of the new year.

The recent rise is partly due to renewed speculation that Vodafone will sell off its 45% stake in Verizon Wireless and pay a large one-off special dividend. But even after the rise, there are still annual dividends of between 5% and 6% on the cards, with the shares on a forward price-to-earnings ratio of around 12 — there’s plenty of scope for further rewards there.

J Sainsbury
I came close to highlighting Wm. Morrison Supermarkets, whose shares recovered a healthy 5.5% over the month, but that was eclipsed by a more impressive 8.7% rise from J Sainsbury , taking its shares up 30 pence to 376 pence and setting a new 52-week record in the process.

A fourth-quarter trading update released on March 19 told us that total sales for the 10 weeks to 16 March were up 7.1%, with like-for-like sales up 4.2%. But have you missed out on the rise? Well, Sainsbury’s shares are still on a forward P/E of less than 13, lower than the FTSE 100 average, and there’s a 4.5% dividend forecast — the boat has not yet sailed.

AstraZeneca
For some time, investors have feared that the dependence of AstraZeneca  on the blockbuster drugs model could leave it vulnerable to the expiry of its patents and to increasing competition from generic drugs.

But on March 21, chief executive Pascal Soriot announced plans for the company to “return to growth” and “achieve scientific leadership”. There will be no deviation from AstraZeneca’s basic business model, though, with Soriot insisting: “Our vision is clear — to be a global biopharmaceutical company with a focused portfolio in core therapy areas, underpinned by distinctive science and a growing late-stage pipeline.”

The shares leapt on the news, gaining 253 pence (8.4%) over the month to reach 3,248 pence. It could be the start of something good.

BAE Systems
An engineer doing well? Yes, BAE Systems  shares picked up 29 pence during March for an 8% rise to 384 pence, which makes a gain of 42% since a June 2012 low of 270 pence. Since last summer, we’ve had a full-year dividend yield of 5.8%, and forecasts put the yield for this year at 5.2%. And that’s from shares which, though they have soared, are still on a forward P/E of only 9.

Now, there might be some people who don’t think …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

3 Neil Woodford Low-P/E Shares

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By G. A. Chester, The Motley Fool

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LONDON — Ace City investor Neil Woodford has thrashed the FTSE 100 over the past five, 10, and 15 years. Hence, I always keep an eye on his holdings for promising investment ideas.

Woodford is very selective in picking shares for his 20 billion pound funds. Fewer than one in five of the U.K.’s top 100 companies earn a place in his market-beating portfolios.

The following three companies are all at a price-to-earnings ratio of less than 10:

Company

Share Price (Pence)

P/E

AstraZeneca 

3,250

7.7

BAE Systems 

385

9.9

Wm. Morrison Supermarkets 

275

9.9

AstraZeneca
The pharmaceuticals industry is Woodford’s biggest sector bet. And AstraZeneca is his biggest single holding, weighing in at more than 8%.

The No. 2 pharma group within the FTSE 100 is suffering falling revenues because of expiring patents on some of its blockbuster drugs. However, the market likes what it’s been hearing from new chief executive Pascal Soriot, who took over last October — particularly his detailed plans for returning Astra to growth, announced last week.

It will take some time for Soriot’s strategy to bear fruit. As such, analysts are forecasting an 18% fall in earnings per share this year, followed by a 3% fall in 2014. The forecasts push the historic P/E of 7.7 up to 9.9 on the 2014 EPS number — still firmly in value territory. There’s a chunky forward dividend income of 5.6%, too.

BAE Systems
BAE Systems is another of Woodford’s holdings that has seen its revenues under pressure. In BAE‘s case, cutbacks in defense spending in the company’s major U.S. and U.K. markets have been the source of the problem.

However, while AstraZeneca’s return to growth is expected to be rather protracted, news flow has been improving at BAE, and the City is forecasting a quick earnings bounce-back for the company after a 15% decline in 2012.

Analysts have penciled in EPS growth of 10% for 2013. That forecast means the historic P/E of 9.9 falls to just 9 for the current year. There’s a prospective dividend income of more than 5% to boot.

Morrisons
Morrisons is the only supermarket Woodford holds in his funds. In reporting its annual results earlier this month, the company said it expects the challenging consumer and market environment seen in 2012 to continue in 2013.

Nevertheless, chief executive Dalton Philips was upbeat about accelerating the group’s multichannel presence and chain of convenience stores. Morrisons is behind its rivals on both these fronts, but the flipside of that is it has greater scope for growth.

However, analysts are expecting group earnings to make little headway for the next year or two. After a 7% rise in EPS last year, City forecasters reckon EPS will be no higher in two years’ time. As such, the historic and forward P/Es are the same — 9.9 — while a prospective dividend income of 4.7% is above the market average.

Woodford excels at finding big winners among unloved shares for his market-beating funds, and two of the three companies I’ve highlighted feature within this …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Should You Buy AstraZeneca Today?

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By Royston Wild, The Motley Fool

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LONDON — I believe that pharmaceuticals play AstraZeneca  is at risk of a fresh share price collapse, as current levels do not reflect the mountain the company has to ascend to turn its revenues around. Societe Generale last week stuck a 2,650 pence price tag on the company’s stock, an 18% discount to the two-and-a-half-year high above 3,235 pence punched recently.

In my opinion, the company remains highly susceptible to renewed negative re-ratings, with earnings in coming years ready to continue tumbling before its restructuring program kicks into gear and new product development ratchets up.

Earnings slump as patents expire
AstraZeneca announced in January that group turnover slumped 17% to almost $28 billion in 2012, in turn driving pre-tax profit a chunky 38% lower to $7.7 billion. The result was driven by the loss of exclusivity across a number of its key brands — indeed, the firm noted that patent issues related to its Seroquel IR, Nexium, Atacand and Merrem medicines accounted for 85% of the revenue dip.

The company has faced severe criticism in recent times as it has failed to adequately boost its new product pipeline to compensate for such significant patent expiries. New chief executive Pascal Soriot has been entrusted with overseeing a massive restructuring of the group, which includes the establishment of new research bases across Europe and North America, designed to underpin long-term innovation.

Further revenues pain expected
In the meantime, however, City forecasters expect earnings per share to collapse further in 2013 following the heavy 12% decline recorded last year. A drop of 19%, to 345 pence, is expected before falling another 3% in 2014 to 334 pence.

The pharmaceuticals giant does at least offer projected dividend yields well ahead of the 3.5% FTSE 100 average, however, with yields of 5.8% and 5.9% expected this year and next, respectively. And these payouts are pretty well protected, with coverage of 1.9 times for these years just below the widely regarded safety marker of 2.

AstraZeneca carries a P/E ratio of 9.4 and 9.7 for 2013 and 2014 respectively, providing a massive discount to the forward multiple of 31.3 for the broader pharmaceuticals and biotechnology sector.

Although this could a solid base from which to accrue juicy gains, the prospect of rising earnings pressure could drive share prices lower in the medium term. I would also like to see further progress from its restructuring plan before selecting AstraZeneca for my own stocks portfolio.

The prescription for plump returns
Although AstraZeneca presents too much risk in my opinion, check out this newly updated special report that highlights a host of other FTSE winners identified by ace fund manager Neil Woodford.

Woodford — head of UK Equities at Invesco Perpetual — has more than 30 years’ experience in the industry, and has identified two other fantastic pharmaceutical firms in the report set to deliver spectacular investor returns.

The report, compiled by The Motley Fool’s crack team of analysts, is totally free and comes with no further obligation. Click here now …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Should I Borrow to Invest in AstraZeneca, National Grid, and Vodafone Group?

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By Harvey Jones, The Motley Fool

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LONDON — Crazy days! Interest rates have been stuck at all-time lows for more than four years, and the first rate hike could be another four years away. This has led to some crazy anomalies.

You can now get a five-year fixed-rate mortgage charging just 2.74%, up to 60% loan-to-value (LTV), or a 10-year deal at 3.99%, up to 75% LTV (subject to status, as they say).

At the same time, you can earn a yield of 5% and 6% by investing in solid FTSE 100 favorites, plus the prospect of capital growth if QE-fuelled markets keep rising.

I wouldn’t normally urge you to borrow to invest in shares, because gearing adds an extra layer of risk. But does it make sense today?

Borrow and buy
Do you expect your portfolio to deliver a total return of more than 4% a year over the next decade? I certainly do. If so, and if you’ve got enough spare equity in your home to access a best-buy home loan, then, maybe, just maybe, you should be in less of a hurry to pay down that mortgage.

If you’re tempted, I would suggest taking out a long-term fixed-rate loan, preferably for 10 years, so your plans aren’t scuppered by a sudden upward lurch in interest rates.

To add an extra layer of security, you could then invest into a fat FTSE high-yielder or three. Dividend income is taxable, so, if you’re bold enough to follow this controversial course, use your ISA allowance.

I’ll leave you to find out the cheapest way to borrow money, but here are three stocks you might consider investing in.

AstraZeneca
AstraZeneca  currently yields a base-rate-busting 6.1%. Pharmaceutical stocks are supposed to be defensive, but it is some years since this one has appeared solid at the back. AstraZeneca scored an embarrassing own goal with its $15.6 billion acquisition of Medimmune in 2007, while sales and revenues have plunged lately, as lucrative drug patents expire, and the pipeline of new products remains blocked. New chief executive Pascal Soriot has just announced a major reorganization, axing 1,600 jobs, and investing in new research and development (R&D) centres in the U.S., U.K. and Sweden, in a bid to “put science at the heart of everything we do” and improve R&D productivity. The overhaul will last for three uncertain years.

These disappointments have knocked AstraZeneca’s valuation, which trades on a mere seven times earnings, roughly half the FTSE 100 average. Given its forecast earnings per share (EPS) growth of -19% in 2013, and -3% in 2014, that lowly valuation looks richly deserved. But it does give the share price plenty of scope to recover, if Soriot gets his strategy right. Despite its recent troubles, AstraZeneca is up 7% over the past 12 months, giving a total return of 13%. AstraZeneca is also the biggest single holding in dividend dangerman Neil Woodford‘s Invesco-Perpetual High Income fund, at 8.53%, and he tends to get these things right in the longer …read more
Source: FULL ARTICLE at DailyFinance

News, Politics, Government

Can Pascal Soriot Turn Around AstraZeneca? It May Come Down To One Drug

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By Matthew Herper, Forbes Staff This morning in New York, new AstraZeneca chief executive Pascal Soriot is telling investors how he is going to turn around the company that has had the absolute worst track record in research and development among any big pharmaceutical firm. The plan is fairly wide-ranging and involves a lot of the steps one might expect: new layoffs (2,300 jobs); a re-focusing of research and development on three areas: heart disease and diabetes; oncology; and respiratory and inflammation; new R&D initiatives involving Moderna, a biotech company, and the Karolinska Instutet; moving the company’s headquarters to its R&D hub in Cambridge, U.K.; re-focusing on emerging markets, where AZ already gets $6 billion in sales, especially China. But the short-term key to delivering on his promises today seems to come down to a single drug: Brilinta, the Plavix competitor that AstraZeneca introduced in 2011 which has so far disappointed, generating  just $324 million in global sales last year. This is a medicine to prevent heart attacks and strokes in patients who suffer acute coronary syndrome, the condition that occurs after a heart attack or serious heart-related chest pain. It works by preventing the formation of blood clots. …read more
Source: FULL ARTICLE at Forbes Latest

Business, Finance, Occupation & Industry

AstraZeneca to Establish Strategic R&D Center in Gaithersburg, Md; Wilmington Remains North America

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By Business Wirevia The Motley Fool

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AstraZeneca to Establish Strategic R&D Center in Gaithersburg, Md; Wilmington Remains North America Commercial Headquarters

WILMINGTON, Del.–(BUSINESS WIRE)– AstraZeneca (NYS: AZN) announced today that Gaithersburg, Md., will be one of three global research and development centers to improve pipeline productivity and to establish the company as a global leader in biopharmaceutical innovation. Additionally, US-based global marketing and specialty care commercial functions will be centered in Gaithersburg, currently the site of MedImmune’s headquarters and the primary location for AstraZeneca’s biologics activities.

The relocation of research and development, global marketing and specialty care positions from Wilmington will be carried out through 2015. The North America commercial headquarters, along with several corporate-based support functions, will remain in Wilmington.

The changes are part of AstraZeneca’s announcement to invest in strategic research and development centers in Cambridge, UK; Gaithersburg, Md.; and Mölndal, Sweden. The proposals are designed to co-locate teams to improve collaboration and put science and the patient at the heart of everything the company does. The changes will also simplify the company’s global site footprint.

Pascal Soriot, Chief Executive Officer, AstraZeneca said: “The changes we are proposing represent an exciting and important opportunity to put science at the heart of everything we do because our long-term success depends on improving R&D productivity and achieving scientific leadership. This is a major investment in the future of this company that will accelerate innovation by improving collaboration, reducing complexity and speeding up decision-making. The strategic centers will also allow us to tap into important bioscience hotspots, providing more of our people with easy access to leading-edge academic and industry networks, scientific talent and valuable partnering opportunities.”

The consolidation of AstraZeneca’s global R&D footprint will have an impact on sites in the United States. About 1,200 positions will leave Wilmington, while there will be an increase of about 300 positions in Gaithersburg. The changes announced today will lead to an estimated overall reduction of about 650 positions in the US, while around 170 will relocate to other AstraZeneca sites in the US or overseas.

“I recognize that our plans will have a significant impact on many of our people and our stakeholders at the affected sites. We are fully committed to treating all our employees with respect and fairness as we navigate this important period of change,” Pascal Soriot said.

AstraZeneca will provide an update on its business strategy and implementation plans at its Investor Day presentation on Thursday, March 21.

…read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

3 Things to Love About AstraZeneca

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By G. A. Chester, The Motley Fool

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LONDON — There are things to love and loathe about most companies. Today, I’m going to tell you about three things to love about FTSE 100 pharma group AstraZeneca .

I’ll also be asking whether these positive factors make Astra a good investment today.

New broom
AstraZeneca chief executive David Brennan was ousted last year. Major shareholders blamed him for failing to replenish the company’s drugs pipeline during his six-year tenure and judged his one big acquisition — biotech firm MedImmune for around 10 billion pounds — an expensive failure.

New boss Pascal Soriot was poached from Swiss rival Roche Holding AG where he was chief operating officer of the pharmaceutical division. Prior to that Soriot led the successful merger of US biologics firm Genentech and Roche.

An industry veteran of 27 years, Soriot has the credentials to get Astra back on track. He’s already shaken up senior management and begun a restructuring that could even get MedImmune delivering.

High yield
Astra has a policy of growing the annual dividend — or, at a minimum, maintaining it — and has delivered on the dividend over the past decade.

The company’s aim is for the dividend to be twice covered by earnings, although this isn’t an absolute restraint. In fact, the board has implied that in the next few years — as the company transitions from declining revenues from expiring patents to new products coming on line — cover may be lower in order to maintain the dividend.

At a current share price of 3,070 pence, analyst forecasts for 2013 give a juicy 5.8% yield.

Defensive
Big pharma is a defensive sector, meaning it is less affected by economic conditions than cyclical sectors, such as construction and retail. Despite Astra‘s difficulties of recent years, its shares have continued to be less volatile than the market during periods of stress.

During the great bear market of 2007-09 when the FTSE 100 fell 48% — and cyclical companies sank even further — Astra’s shares declined just 17%.

A good investment?
Clearly, Astra has issues that need to be resolved. If it didn’t, you wouldn’t be able to buy the shares on less than 10 times earnings and with a yield of 5.8%.

If Astra does negotiate the next couple of years successfully, investors should see a very good capital and income return from the present share price. The risk is that the recovery becomes protracted and produces a dividend cut into the bargain.

One renowned investor who is backing Astra to deliver on growth and income is ace City fund manager Neil Woodford.

Woodford, who has thrashed the FTSE 100 over the past five, 10 and 15 years with his 22 billion pound funds, has a proven knack of picking great dividend winners. Astra is the biggest holding in his funds.

You can learn all about this master investor’s other favourite blue chips in a newly updated exclusive Motley Fool report. This report is free to private investors for a limited time …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Should I Buy AstraZeneca for My ISA

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By Harvey Jones, The Motley Fool

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LONDON — You have only a few weeks to use your ISA allowance before the April 5 deadline, so don’t fluff this great tax-saving opportunity. You can invest up to 11,280 pounds in the current tax year, and put the lot of it into stocks and shares. To find out more, click here. 

But which stocks should you buy? How about AstraZeneca  ?

The power of Zen
I’ve been a bit rude about AstraZeneca in the past, complaining that its share price has gone nowhere, slowly.

But this FTSE 100 pharmaceutical giant has some impressive admirers, notably income supremo Neil Woodford, so maybe I’m missing something. Should I buy AstraZeneca for my ISA?

This stock crushes cash
There is one big fat juicy reason to buy AstraZeneca. It currently gives you a stonking dividend yield of 6%, one of the best in the FTSE 100.

That 6% yield is twelve times the Bank of England base rate, and three times as much as any “best buy” cash ISA can deliver, which struggle to pay more than 2%.

Yes, shares are more volatile, but they should be more rewarding over the longer term. Over the past five turbulent years, AstraZeneca’s share price has grown 66%, with all those juicy dividends on top.

Show me the cash account that has done that, and I would pour my life savings into it. It doesn’t exist.

Astra’s weakness
Woodford may have put his faith in this pharma, but the market has been divided.

In January, new chief executive Pascal Soriot warned that 2013 revenues would fall by mid-to-high single digits as product patents expired and a blockage of new products in the pipeline.

Total sales fell 16% in the last three months of 2012, to $7.28 billion, and AstraZeneca’s share price fell 6% in response.

While rival GlaxoSmithKline has a flourishing consumer-health care operation, with familiar brands such as Sensodyne, Panadol, Aquafresh, Lucozade, and Nicorette, AstraZeneca is a pure play on pharmaceuticals and treatment development.

This lack of diversification is dangerous, especially in a time of austerity, when governments are desperately squeezing health budgets along with everything else.

To Russia with hope
Similar to many FTSE 100 companies, AstraZeneca is looking for a healthy injection of emerging-market growth, with revenue from countries such as China, Saudi Arabia and Russia growing 6% in the fourth quarter.

Management has also been working hard to restructure the business and make it more competitive. A full strategic update is due shortly, and if the market receives it favourably, that could give the share price a fillip.

Despite worries over its product pipeline, AstraZeneca still has 71 projects in the clinical phase of development, with another 13 either approved, launched or filed. It also has a joint collaboration with Amgen, the world’s largest biotechnology company, to sell five pipeline products.

Think income
AstraZeneca’s dividend yield may thrash cash, but naturally, the yield is riskier. The good news is that the share’s income is covered 2.3 times by earnings, so management has little need to tamper.

The group’s healthy operating margin of …read more
Source: FULL ARTICLE at DailyFinance