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Outlier in Focus – Sanofi India


We come across a large number of interesting stocks in Capitalmind SNAP Outliers, our discovery tool for stocks with momentum. See a video of how Outliers works, and how to use Outliers to find all-time highs. Here’s a stock we found interesting that’s been an outlier. 
Last week, we took a look at Astral PolyTechnik , a stock that was hitting the all time highs when it came up on our radar and one that has made new all time highs this week as well.

Sanofi – That Combiflam just works!

Today, we are looking at Sanofi India. Sanofi India is a Multinational Pharmaceutical Company headquartered in Paris, France. It’s been around more than 60 years, and in India, the stock became listed thanks to the merger of Aventis into Sanofi. Aventis had been listed in India since 1994, first as HOECSHT and later as AVENTIS with the changes being dictated by the merger / de-mergers at parent company level.Sanofi
The Company has a diversified portfolio in Cardio-metabolism, Central Nervous System, Intensive Care, Consumer Healthcare, Gastrointestinal Disorders, Anti-infectives, Bone & Joint, Respiratory, etc.
It’s known for the pain-killer Combiflam, the anti-allergic Allegra, the insulin injection Lantus and the anti-coagulant Clexane.
Post the financial crisis, the stock has had a great run in line though given the overall firmness we saw with much of the Pharma pack, this stock hasn’t been a outlier.
Sanofi India - Relative Performance
So strong has been the momentum in the stock that it has hit its all-time high every year since 2013. Now, after a 20-month range bound performance, the stock seems set to break above the all-time high once again.

Financials: Boring But Decent ROE

The company follows a January to December financial year and while growth hasn’t been great, it’s chugging along nicely with average Return on Equity over the last 8 years being close to 20%.
Outlier in Focus - Sanofi India
Over the years, the stock has seen a significant upgrading in terms of earnings investors seem comfortable paying for the future growth.
Outlier in Focus - Sanofi India
With a Price/Earnings to Growth ratio of nearly 4, this stock isn’t cheap. But when stocks break all-time highs, the probability is that short term momentum can push the stock way higher before mean reversion pulls it back.
Here’s an interesting tidbit: Vijay Mallya was the Chairman of this company till 2015.
Sanofi’s move into a new high, or close to one, counters the general unhappiness with Pharma stocks. But the Trend is your Friend. Trade the trend until it bends.


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