Stocks Under Focus: AstraZeneca PLC, IG Group Holdings PLC

Stocks Under Focus: AstraZeneca PLC, IG Group Holdings PLC
AZN-Business Overview  

Biopharmaceutical company AstraZeneca PLC (AZN), specialises in the development and commercialization of prescription-based medicines. The company focuses on specific areas of medical science and diseases which include oncology, respiratory, inflammation & autoimmunity, neuroscience, cardiovascular, renal & metabolism, infection & vaccines. Currently, the stock is a constituent of the FTSE 100 index.

AZN-Recent developments

AstraZeneca Plc will now develop, manufacture and market Linzess in China. Linzess is used for treating patients suffering from constipation and issues with bowel movements. This was announced by the company after amending the original tie up with Ironwood Pharmaceuticals Inc.

Earlier in 2012, AstraZeneca Plc and Ironwood Pharmaceuticals Inc decided to jointly develop and market Linzess in China. Going forward, Ironwood Pharmaceuticals Inc will not be part of research and development and marketing operations.

AZN- Financial Highlights for H1 FY19

The company’s revenue surged by 9 per cent at actual basis to $11,314 million in H1 FY19 against the same period last year, while on a CER basis, revenue increased by 14 per cent. The surge in revenue can be attributed to the rise in product sales of 12 per cent (actual basis) and 17 per cent (CER basis). The reported gross margin surged by two percentage points to 80 per cent, partially reflecting the manufacturing mix and product sales efficiencies in the first half of 2019. The core gross margin surged by one percentage point to 81 per cent in H1 FY19.

The company’s operating profit (reported) rose by 9 per cent in the first half of FY19 (12 per cent at CER) to $1,590 million. Also, the core operating profit rose by 39 per cent (44 per cent at CER) to $3,011 million in H1 FY19. The operating margin (reported) was stable at 14 per cent in H1 FY19. In addition, the core operating margin surged by six percentage points (five at CER) to 27 per cent in H1 FY19.

The company’s EPS (reported) surged by 3 per cent to $0.56 in H1 FY19 as against the same period in the previous year. The core EPS of the company stood at $1.62 in H1 FY19, a rise of 38 per cent (40 per cent at CER) from that in the same period of previous year. The company’s interim dividend per share remains unchanged at $0.90 in H1 FY19.

AZN-Share price performance

Daily Chart as on 19-September-19, before the market closed (Source: Thomson Reuters)

On 19th September 2019, while writing at 02:50 PM GMT, AstraZeneca PLC shares were clocking a current market price of GBX 7,079 per share; which was more by 1.90 per cent in comparison to the last traded price of the previous day. The company’s market capitalisation was at £91.136 billion at the time of writing.

On 2nd September 2019, the shares of AstraZeneca PLC have touched a new peak of GBX 7,583 and reached the lowest price level of GBX 5,312 on 28th January 2019 in the last 52 weeks. The company’s shares were trading at 6.64 per cent lower from the 52-week high price mark and 33.26 per cent higher the 52-week low price mark at the current trading level as can be seen in the price chart.

The stock’s traded volume was hovering around 833,275 at the time of writing before the market close. The company’s 5-day stock's average traded volume was 1,648,451.60; 30 days average traded volume- 1,791,481.23 and 90 days average traded volume – 1,754,683.02. The volatility of the company’s stock is lower as compared with the index taken as the benchmark, as the beta of the company’s stock was recorded at 0.83 with a gross dividend yield of 3.15 per cent.

The shares of the company have delivered a positive return of 8.38 per cent in the last quarter. The company’s stock surged by 18.29 per cent from start of the year to till date. The company’s stock has given investors 23.85 per cent of positive return in the last one year.  

IGG-Business overview

Headquartered in the United Kingdom, IG Group Holdings PLC (IGG) provides an online trading platform focused on capital market instruments such as leveraged derivatives which are traded over the counter (OTC), exchange-traded derivatives such as Futures, Options & Swaps along with stock trading and other traded securities globally. The company focuses on contracts for differences (CFDs) and other leveraged derivatives along with spread betting (currently providing in the UK and Ireland only).

IGG-Q1 FY 20 Revenue update

On 19th September 2019, the company announced revenue update for Q1 FY 20 period ended 31st August 2019. The company has reaped benefits from rise in number of active clients and trading activities. The company managed to generate revenue of £129.1 million in Q1 FY20, which was 11 per cent more than the average of quarterly revenues of previous periods in more stricter environments as ESMA measures were in effect throughout.

IGG-Financial Highlights for FY19

The company’s net trading revenues plunged by 16 per cent to £476.9 million in FY19 in comparison to £569.0 million in FY18. This plunge in revenues can be attributed to the impact created by the ESMA implementation and adverse market conditions. The net operating income of the company was recorded at £477.2 million in FY2019 as against £571.2 million in FY18. The operating profit of the company dipped to £192.9 million in FY19 versus £281.1 million in FY18. The PBT (Profit before tax) of the company was recorded at £194.3 million in FY19 as against £280.8 million in FY18.

The company’s profit (attributable to the shareholders) stood at £158.3 million in FY19 as against £226.4 million in FY2018. The basic earnings per share of the company was down by 30.1 per cent to 43.1 pence in FY19 from 61.7 pence in FY18. The management of the company has recommended a final dividend 30.24 pence per share, taking the annual dividend per share to 43.2 pence per share in FY19, which remained flat as compared to dividend paid for FY18. If the things work as planned and proposed dividend is approved by shareholders, then the effective payment date will be 24th October 2019 to those shareholders who are on the register by the close of business hours on 27th September 2019.

The company’s performance has dropped in the financial year 2019. The company looks forward to reviving its revenue growth in the financial year 2020. Furthermore, the company shall make more investments in promoting its brand value and might go for potential acquisitions.

However, the company might face some challenges such as regulatory headwinds. Also, IGG operates in lower leverage markets. Lower volatility sometimes discourages trade. The active clients have reduced, and transaction charges levied have often hurt the traders. The changes in taxation will also create a huge impact on this business.

IGG-Share price performance

Daily Chart as on 19-September-19, before the market closed (Source: Thomson Reuters)

On 19th September 2019, while writing at 02:55 PM GMT, IG Group Holdings PLC shares were clocking a current market price of GBX 635.4 per share; which was more by 9.81 per cent in comparison to the last traded price of the previous day. The company’s market capitalisation was at £2.137 billion at the time of writing.

On 24th September 2018, the shares of IG Group Holdings PLC have touched a new peak of GBX 881.72 and reached the lowest price level of GBX 467.40 on 21st May 2019 in the last 52 weeks. The company’s shares were trading at 27.93 per cent lower from the 52-week high price mark and 35.94 per cent higher the 52-week low price mark at the current trading level as can be seen in the price chart.

The stock’s traded volume was hovering around 1,675,533 at the time of writing before the market close. The company’s 5-day stock's average traded volume was 742,722.60; 30 days average traded volume- 829,447.80 and 90 days average traded volume – 993,871.00. The volatility of the company’s stock is much lower as compared with the index taken as the benchmark, as the beta of the company’s stock was recorded at 0.20 with a gross dividend yield of 7.47 per cent.

The shares of the company have delivered a positive return of 0.28 per cent in the last quarter. The company’s stock surged by 1.51 per cent from start of the year to till date. The company’s stock has given investors 33.49 per cent of negative return in the last year. 

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