AstraZeneca: Where Has All the Cash Gone?

[Dod101]

Now up 7.8% or nearly £5. A takeover bid or what?

Meanwhile Unilever is down about 2% to just under £49

Win some lose some.

Dod

[ADrunkenMarcus]

I've still got a big holding, held since 1998. I'm glad I trimmed though!

Best wishes

Mark.

[Bouleversee]

The Today programme this morning mentioned that a drug for the treatment of ovarian cancer was to be prescribed more widely under the NHS. Did anyone catch the name of the drug? I don't think the manufacturer was mentioned but I wondered whether it was the AZN one and might explain the rise in s.p.

[Bouleversee]

I thought it might be as it mentioned it was for the inherited variety (i.e. BRCA mutation as mentioned in earlier posts). Excellent. I think it was previously only used in advanced stages but is now to be used in earlier stages which would seem to make a lot more sense.

[grimer]

This is not exactly HYP like behaviour! I hold but it is not a very big holding. Otherwise the rapid price rise might be making a case for trimming but I see no reason to sell out and certainly not on account of the IC's opinion.

Dod

I've held for a few years. The current ROCE, dividend cover, etc, are making me nervous. I don't see any point in waiting for the market to resolve those issues.

Moderator Message:
Stop losses aren't part of HYPing, and are probably more properly considered as trading. Let's avoid further discussion, please. -- MDW1954

[Bouleversee]

What happened to the post confirming that the ovarian cancer drug mentioned on Today was definitely the AZN one, to which I was replying in my last post?

FWIW: " StockMarketWire.com - Barclays Capital today reaffirms its overweight investment rating on AstraZeneca PLC [LON:AZN] and raised its price target to 7600p (from 7500p)."

[Wizard]

So what seems to me a vital piece of information about a switch in NICE policy which will inevitably lead to a much greater use of the AZN ovarian cancer treatment and hence one might assume a big hike in profits (these drugs don't come cheap) is removed from this board ...[Truncated - Chris]

But if it were discussed under Company Share News there would be no issue with mentioning them. I thought this sort of topic was exactly why that Board was set up, rather than having a rolling AZN topic here.

Moderator Message:
A discussion of AZN and stop losses has been moved to Strategies. This board is for HYP. Drug-related posts are best moved Company News. -- MDW1954

[ADrunkenMarcus]

At current exchange rates, AstraZeneca offers a 3.3% dividend yield:

$2.8 / 1.24 =
£2.26 / £69 =

3.3%

A continuing weakening of the Pound will increase the dividend in Sterling terms, even though it's frozen in its reporting currency.

Best wishes

Mark.

[grimer]

At current exchange rates, AstraZeneca offers a 3.3% dividend yield:

$2.8 / 1.24 =
£2.26 / £69 =

3.3%

A continuing weakening of the Pound will increase the dividend in Sterling terms, even though it's frozen in its reporting currency.

Best wishes

Mark.

The FTSE 100 has, apparently, a 4.5% yield. If AZN is only yielding 3.3%, is it still a HYP share?

[Dod101]

Of course it is. Not so long ago it was yielding something well over the FTSE100 average.

Dod

[vrdiver]

The FTSE 100 has, apparently, a 4.5% yield. If AZN is only yielding 3.3%, is it still a HYP share?

It may not be a HYP buy at today's yield, but it will be in many people's HY Portfolio as it has been a high yielder at various times (and for long stretches) over the years.
For people who don't trade that often, or whose rules might only evict a share from their HYP when its yield drops below their own pre-determined threshold, it will likely stay a HYP share for decades to come.

Evicting shares from the HYP the moment they dropped below say, the FTSE 100 yield, would create a lot of portfolio churn, chasing yields rather than establishing income. Shares are selected based on (amongst other things) a high yield, but kept for their income. If AZN's share price rises by another 10% but the dividend remains constant, the income is still as it was, so nothing to do.

Of course, some will trim/top-slice or otherwise use the increased capital value to ratchet up their dividend stream. Nothing wrong with that either.

VRD

Edited to remove apostrophe typo!

[IanTHughes]

At current exchange rates, AstraZeneca offers a 3.3% dividend yield:

$2.8 / 1.24 =
£2.26 / £69 =

3.3%

A continuing weakening of the Pound will increase the dividend in Sterling terms, even though it's frozen in its reporting currency..

The FTSE 100 has, apparently, a 4.5% yield. If AZN is only yielding 3.3%, is it still a HYP share?

Yes and No

Yes, if AstraZeneca (AZN) is already a holding in one's HYP, then it is an HYP share. Yes, if the yield offered by AZN (3.30%) is the highest available where the dividend appears sustainable and other criteria such as Diversification are met, then it is an HYP Share. No, if the yield offered by AZN (3.30%) is not the highest available where the dividend appears sustainable and other criteria such as Diversification are met, then it is not an HYP Share!

Ok so I should have answered Yes, Yes and No

Seriously, HYP is a Portfolio Strategy, a Long Term Buy and Hold Income strategy, even an Eternity strategy. The term "HYP" refers to that strategy, not individual shares!

If you must ask a question about the efficacy of selecting AZN right now, then the question that one should ask is whether AZN is currently a candidate for a purchase in an HYP. Even then the answer may well depend on an individual HYPer.


Ian

[Dod101]

AstraZeneca is close to being a candidate for a top slice in my book. It looks a bit frothy to me but in any case it is now well above my median holding. I will though keep the share one way or the other.

Dod

[idpickering]

AstraZeneca is close to being a candidate for a top slice in my book. It looks a bit frothy to me but in any case it is now well above my median holding. I will though keep the share one way or the other.

Dod

I actually top slice AZN twice last year as it was getting to big in my HYP. I must admit that I regret just not leaving it alone. Shares come into and out of fashion after all. I wouldn’t buy AZN currently I might add.

Ian.

[Arborbridge]

Five years back, weren't there doomsters who predicted disaster owing to a patent cliff?

GSK has been a bit flat, but even that has put on some growth in share price over ten years, and AZN has done well. Income has been virtually fixed with GSK and reasonable with AZN. I couldn't have known which would have been the better ten years ago, so I feel justified in having bought both shares.

Patent cliff fears? More reason just to buy and not fret too much afterwards, not to listen too much to the Tower of Babel. On which note, is see even Pearson (which I keep thinking of selling) has perked up just a little.


Arb.

[moorfield]

More reason just to buy and not fret too much afterwards, not to listen too much to the Tower of Babel.

aka, "Strategic Ignorance" ? Pyad was onto something .

[bluedonkey]

In a rare move, I sold out of AZN about 6 months ago at about £56. I didn't, and don't, trust their adjusted eps. Over many years, it consistently flatters the basic eps. Eventually the dividend will have to suffer, so a 3.3% yield doesn't look particularly secure to me.

[Dod101]

In a rare move, I sold out of AZN about 6 months ago at about £56. I didn't, and don't, trust their adjusted eps. Over many years, it consistently flatters the basic eps. Eventually the dividend will have to suffer, so a 3.3% yield doesn't look particularly secure to me.

Who cares about a 3.3% yield when we have a capital appreciation of nearly 25% since you sold? That is about 7 years income. I know it is only on paper but I am going to try to do a Unilever and have put in a limit order at £70 to top slice.

This is the HYP -practical Board but trimming is allowed.

Dod

[fisher]

In a rare move, I sold out of AZN about 6 months ago at about £56. I didn't, and don't, trust their adjusted eps. Over many years, it consistently flatters the basic eps. Eventually the dividend will have to suffer, so a 3.3% yield doesn't look particularly secure to me.

Who cares about a 3.3% yield when we have a capital appreciation of nearly 25% since you sold? That is about 7 years income.

Dod

Wow - Mr. Hindsight.

[ADrunkenMarcus]

AZN have been desperate not to cut the dividend, which is why it's been frozen for so long and they've acquired so much debt. If earnings and, more specifically, cashflows recover strongly in 2020-21 as anticipated, then it's hard to see why they would then decide to reduce the distribution unless they were forced. (Whether this capital allocation policy was wise is another matter!) However, I do not see any significant dividend growth until they've begun to reduct the debt burden significantly.

From a high valuation starting point in 1998, AZN has given me a 262% capital gain and returned 135% of the book cost in dividends. Adding the capital gain and dividends (not reinvested) gets a c. 400% total return. Turning each £1 invested into £5 is, I suspect, better than many HYP shares.

Of course, past performance and all that...

Best wishes

Mark.