AstraZeneca PLC (AZN) A Stock to Buy on Insider Confidence?

The AstraZeneca PLC (NYSE:AZN) bulls won the day, but the reality is that the 0.52 points or 1.42 percent advance gave very little definitive technical indication of where the stock could be headed next. On 12 February, the shares traded at $37.2 with a light trade volume of 3.723 million shares. After opening the session at $37.07, the shares went as high as $37.31 and as low as $36.93, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $94.3 billion and now has 2.53 billion shares outstanding. AstraZeneca PLC (AZN) stock has gained 0.68 percent of market value in 21 trading days.

AZN stock has a trailing 3-year beta of 0.46, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $0.97 a share in the trailing twelve months. The stock’s value has fallen -2.05 percent year to date (YTD) against a rise of 10.68 percent in 12 month’s time. The company’s shares still trade -10.95 percent away from its 1-year high of $41.78 and 13.8 percent up from 52-week low of $32.69. The average consensus rating on the company is 1.6, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

AstraZeneca PLC (AZN) will probably climb 12.58 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $54.88 price as 12-month high target. This represents a whopping 47.53 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $42.39, which represents a return potential of 13.95 percent when compared to the closing price of the stock of $37.2 on Tuesday, February 12. The lowest price target for the stock is $28.12 — slightly more than -24.41 percent from AZN’s current share price.

History has shown that shares in AstraZeneca PLC have gone down on 10 different earnings reaction days and are predicted to add 0.03 percent when the company reports upcoming earnings. Investors will get their next glimpse of AZN’s Q4 earnings on February 14. Analysts are forecasting revenue to climb 8.5 percent to $6.27B in the fiscal fourth quarter, while earnings are seen soaring by nearly 16.92 percent to $0.76 per share. It earned $0.35 per share, worse than the $0.4, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $5.34B, worse than the $5.49B analysts expected. Earnings are estimated to increase by -13.4 percent this year, -1.2 percent next year and continue to increase by 13.2 percent annually for the next 5 years.

Let’s take a look at some insider activity at AstraZeneca PLC (NYSE:AZN) and see the pattern. The earliest insider trade took place on 11/12/2014. Astrazeneca Plc parted with a total of 2 million shares of company at average share price of $17. The total for the sales was set at $34 million. After this transaction, the 10% Owner account balance stood at 4.25 million shares. The stock grew 118.82 percent since that insider sale.

The stock is currently hovering around the first support level of $36.98. Below this, the next support is placed in the zone of $36.77. Till the time, the AZN stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 52.68 on daily chart, which may remain a cause for concern. If the price breaks below $36.77 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $37.36 mark may result into a pull-back move towards $37.53 level.

Shares of AstraZeneca PLC (AZN) are trading at a P/E ratio of 37.96 times earnings reported for the past 12 months. The industry AZN operates in has an average P/E of 32.4. Its P/E ratio went as low as 19.77X and as high as 72.15 over the 5-year span.Further, it is sporting a 4.39 on the Price-to-Sales ratio. Compare this with the industry average P/S of 7.48. 79.5 percent is the gross profit margin for AstraZeneca PLC and operating margin sits at 14 percent. Along with this, the net profit margin is 11.3 percent.