The Motley Fool

Why I’d buy AstraZeneca as the FTSE 100 crashes below 5,500

Image source: Getty Images.

As the FTSE 100 crashes, its fall is now a fraction short of 30% since the grip of coronavirus panic tightened. Top stocks have been tumbling too, with AstraZeneca (LSE: AZN) among them.

Shares in the pharmaceuticals giant haven’t suffered as badly as the index, down a slightly less scary 16%. The shares even picked up at the start of March, possibly from investors hoping for an early vaccine breakthrough.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

I rate AstraZeneca as a strong buy at the moment, as the FTSE 100 slumps, while bearing in mind that it could become even better value. But my take on it is not based on the possibility of profits from any coronavirus treatments.

No AstraZeneca vaccine

No, medical experts have made it clear that there’s not going to be any vaccine turning up any time soon. It could take months to even identify the most effective virus parts for stimulating an immune response. And even then, it could take another year or more to complete the test phases and get to full-scale production. The virus will have been and gone by then.

So why am I bullish about AstraZeneca? It’s for a number of reasons, one of which is demonstrated by a news release Thursday. It’s a simple statement that the firm’s phase III trial of cediranib added to Lynparza for a specific form of ovarian cancer has not been successful. “The trial did not meet the primary endpoint in the intent-to-treat (ITT) population of a statistically significant improvement in progression-free survival,” it said.

Why does that matter for investors? Well, between the lines, one thing the update says to me is “Business as usual.” And that’s what an investment in AstraZeneca is all about.

Long term

We should aim all our stock investments at the long term. So any company that can see its way through a few months of pandemic pandemonium, without suffering any significant financial harm, has the potential to be a great investment right now.

But for AstraZeneca, the horizon has to be longer than most. It’s seven and a half years since Pascal Soriot came aboard as chief executive. His target was to get the company’s drug development pipeline back on track. And that’s only just starting to bear fruit.

What harm could the coronavirus do to AstraZeneca? Maybe it will affect the R&D department, if employees should have to stay at home for a while. And perhaps the firm might have to scale back its sales and marketing efforts for a time.

But against the long-term nature of the drugs development business, it would seem like barely a momentary delay. What’s another few months, if the worst comes to the worst, against a decades-long outlook?

Bargain times are back

Prior to the current market downturn, AstraZeneca shares had been flying in anticipation of the company’s return to earnings growth. The bargain years, when I was convinced by AstraZeneca as a long-term investment proposition, were gone.

But I think those buying opportunities have returned once more, and AstraZeneca shares could become even more attractive in the coming weeks if the FTSE 100 crashes further.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US $12.3 TRILLION out of thin air…

And if you click here, we’ll show you something that could be key to unlocking 5G’s full potential...

It’s just ONE innovation from a little-known US company that has quietly spent years preparing for this exact moment…

But you need to get in before the crowd catches onto this ‘sleeping giant’.

Click here to learn more.

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended AstraZeneca. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.