Thursday, September 15, 2011

Buy Sigma Aldrich (SIAL, Dividend and Aggressive Growth Portfolios)


Sigma-Aldrich Corp (SIAL) develops, manufactures and distributes a wide assortment (173,000 products) of biochemicals, organic chemicals, chromatography products and diagnostic reagents in over 166 countries. The company has grown earnings and dividends at a 13-14% annual rate over the last 10 years while earning approximately 20% on its capital. SIAL should be able to continue this performance because:

(1) increased market penetration in emerging markets as well as with major drug companies, research establishments and universities,

(2) new product introductions in analytical, biology and materials sciences,

(3) acquisitions [Cerillant Corp, Resource Technology Corp., Vetec Quimica Fina Lida of Brazil,

(4) an aggressive cost controls through supply chain initiatives and SG&A management,

(5) an ongoing stock buyback program.

The primary negative for the company is its exposure to currency fluctuations.

SIAL is rated A by Value Line, has a 12% debt to equity ratio and its stock yields 1.0%.


Chart
Note: SIAL stock has made great progress off the March 2009 low, quickly surpassing the down trend off its August 2008 high (red line) and the November 2008 trading high (green line). Long term the stock is in an up trend (straight blue lines). The wiggly blue lines are Bollinger Bands. Both the Dividend Growth and Aggressive Growth Portfolios own a full position in SIAL. The stock is currently on both Buy Lists. The lower boundary of its Sell Half Range is $84.


Sigma-Aldrich Corp (SIAL) develops, manufactures and distributes a wide assortment (173,000 products) of biochemicals, organic chemicals, chromatography products and diagnostic reagents in over 166 countries. The company has grown earnings and dividends at a 13-14% annual rate over the last 10 years while earning approximately 20% on its capital. SIAL should be able to continue this performance because:

(1) increased market penetration in emerging markets as well as with major drug companies, research establishments and universities,

(2) new product introductions in analytical, biology and materials sciences,

(3) acquisitions [Cerillant Corp, Resource Technology Corp., Vetec Quimica Fina Lida of Brazil,

(4) an aggressive cost controls through supply chain initiatives and SG&A management,

(5) an ongoing stock buyback program.

The primary negative for the company is its exposure to currency fluctuations.

SIAL is rated A by Value Line, has a 12% debt to equity ratio and its stock yields 1.0%.


Chart

Note: SIAL stock has made great progress off the March 2009 low, quickly surpassing the down trend off its August 2008 high (red line) and the November 2008 trading high (green line). Long term the stock is in an up trend (straight blue lines). The wiggly blue lines are Bollinger Bands. Both the Dividend Growth and Aggressive Growth Portfolios own a full position in SIAL. The stock is currently on both Buy Lists. The lower boundary of its Sell Half Range is $84.




http://finance.yahoo.com/q?s=SIAL