Is now a good time to buy AstraZeneca (AZN)?

[ZipserSir]

From the AJ Bell YouInvest lunch time newsletter "AstraZeneca (AZN) fell 2.5% to £52.13 after declining sales of heart-disease treatment Crestor contributed to a 36% slump in first-quarter profit."

The share price has stormed away since the middle of February, but Friday's reversal might be an opportunity to get in if the preceding trend picks up again.

Any AZN watchers here? Would be interested to know your thoughts...

[moorfield]

Is now a good time to buy AstraZeneca (AZN)?.

On a yield of 3.9%, no. (but I continue to hold)

[IanTHughes]

The share price has stormed away since the middle of February, but Friday's reversal might be an opportunity to get in if the preceding trend picks up again.

This is the HYP Practical board so ..... no. There are many suitable shares with a greater yield than the paltry 3.86% offered by AstarZeneca (AZN) right now.


Ian

[Arborbridge]

From the AJ Bell YouInvest lunch time newsletter "AstraZeneca (AZN) fell 2.5% to £52.13 after declining sales of heart-disease treatment Crestor contributed to a 36% slump in first-quarter profit."

The share price has stormed away since the middle of February, but Friday's reversal might be an opportunity to get in if the preceding trend picks up again.

Any AZN watchers here? Would be interested to know your thoughts...

If a price is indeed "storming away" then one is too late given the sub-par yield.

Arb.

[toofast2live]

The share price has stormed away since the middle of February, but Friday's reversal might be an opportunity to get in if the preceding trend picks up again.

This is the HYP Practical board so ..... no. There are many suitable shares with a greater yield than the paltry 3.86% offered by AstarZeneca (AZN) right now.


Ian

3.86% is quite nice. Don’t be tempted by all those horrid mega high yielders. They sometimes end in tears.

[IanTHughes]

The share price has stormed away since the middle of February, but Friday's reversal might be an opportunity to get in if the preceding trend picks up again.

This is the HYP Practical board so ..... no. There are many suitable shares with a greater yield than the paltry 3.86% offered by AstarZeneca (AZN) right now.


Ian

3.86% is quite nice. Don’t be tempted by all those horrid mega high yielders. They sometimes end in tears.

Suitable shares with a higher yield does not mean "Mega high yielders", at least not in my book. There are maybe a dozen or more suitable HYP candidates, from various sectors, that offer a better yield than 3.86%. One example, if one is determined to buy the same sector as AstraZeneca (AZN), is GlaxoSmithKline (GSK) which offers 5.38%. In an Income Strategy like HYP, why would anyone settle for the lower yield?


Ian

[ZipserSir]

Interesting thoughts fellow travellers.

3.86% is in fact a higher than average yield so not to be sneezed at even if there are higher yields out there. I'd like to have bought in at a lower price, but we'd all like to do that, and it might that if the share price continues it rising trend it will cease to have a yield above average in the very near future. I already hold GSK and don't want anymore at the moment; I don't hold AZN. AZN appears to be blue chip royalty given that it appears in so many portfolios, so the chance to get some - even at the current 'modest' yield is quite attractive.

[IanTHughes]

I already hold GSK and don't want anymore at the moment; I don't hold AZN. AZN appears to be blue chip royalty given that it appears in so many portfolios, so the chance to get some - even at the current 'modest' yield is quite attractive.

I was using GSK as an example of a higher yield but if your portfolio already holds what you consider enough, it is not a "suitable" HYP selection for you right now.

Anyway, whatever you decide to do, I wish you good fortune


Ian

[Arborbridge]

The share price has stormed away since the middle of February, but Friday's reversal might be an opportunity to get in if the preceding trend picks up again.

This is the HYP Practical board so ..... no. There are many suitable shares with a greater yield than the paltry 3.86% offered by AstarZeneca (AZN) right now.


Ian

3.86% is quite nice. Don’t be tempted by all those horrid mega high yielders. They sometimes end in tears.

Don't spin the point: one does not have to turn to mega high yielders - horrid or not! But 3.86% is not high yield in relation to the FTSE, which is the general starting point for HYP. I think you could achieve significantly above 3.86% without undue risk - and let's face it, there are plenty of people who would suggest AZN carries quite some risk also. In fact, not many years ago it was written off as "doomed".

Moderator Message:
EPIC corrected. - Chris

[idpickering]

Is now a good time to buy AstraZeneca (AZN)?.

On a yield of 3.9%, no. (but I continue to hold)

Likewise moorfield. I have a 'full' holding of these on board, alongside GlaxoSmithKline, so shan't be topping up in that sector currently, although I shall continue to hang onto my shares of both.

Ian.

[idpickering]

3.86% is quite nice. Don’t be tempted by all those horrid mega high yielders. They sometimes end in tears.

Well said. Have a rec/thanks.

Ian.

[idpickering]

It appears AstraZeneca are a popular buy thus far today, and are up 2.21% as I type. For me, they (AZN) form part of a hopefully solid base for my HYP, along with fellow pharma GlaxoSmithKline, together with other HYP stalwarts such as Shell RDSB, BP, the tobaccos Imperial Brands and British American Tobacco, and the like. Others might think differently of course.

Ian.

[Julian]

I'm really not intending to break board protocol and promote any discussion of the alternative I raise but, looking at it purely from an HYP selection perspective, the problem I start having when a share gets into that sort of 3.86% yield territory is that it then achieves rough parity or even a slightly lower yield vs the big, solid, boring (and I don't mean that as a criticism) income ITs such as City of London. As someone who runs a mixed HYP and income IT strategy that tends to push me towards topping up the IT part of my income portfolio. If I'm going to add to a direct holding I need some clear water in terms of yield between whatever I buy and a very safe (my perception) income IT. For me the comparison with overall FTSE100 yield is of less practical interest because to access that I need a tracker and trackers make no attempt to provide smooth monotonically increasing dividends which is the principal aim of my income portfolio hence the solid income ITs are the floor against which I judge an HYP purchase/top-up.

As for AZN, presumably the markets are bidding it up, and hence pushing yield down, because they are optimistic about some of what is in its pipeline. There are definite things in AZN that I like, e.g. a strong biologic operation (disclaimer - one of my best friends works as a scientist in this bit of AZN so maybe I'm biased). My understanding from her and other very close friends in the pharma industry is that despite some fairly recent regulatory changes that have made it easier for other companies to get regulatory approval for copycat biologics (biosimilars) it is still not as easy as a generic manufacturer getting approval to launch a copy of a non-biologic (small molecule) drug after it comes off patent so maybe the cliff edge on biologics won't be as severe as it has been for non-biologic stuff.

- Julian