The CSL Limited (ASX: CSL) share price hit a new all-time high today following the company’s annual general meeting (AGM). Is it time to buy CSL shares?
About CSL
Now a $113 billion ASX behemoth, CSL was founded in 1916 as the Commonwealth Serum Laboratories and was sold by the Australian Government to investors via the sharemarket in 1994 at $2.30 per share.
Today, CSL is a global biotechnology company developing innovative medicines that save lives and protect the public health, through blood plasma vaccines and antivenoms, which provide relief for potentially life-threatening medical conditions.
Today’s AGM
This is the first time the company has held its AGM in Sydney; a good opportunity to enable over 48,000 shareholders living in NSW, around 30% of the company’s 167,824 shareholder base, to attend.
With the CSL share price pushing to a record high, investors seem to be pleased with what was said at the AGM. In his first year as Chair, Brian McNamee talked much about the values of the business, the focus of the board and their engagement with the broader stakeholder community.
Managing Director Paul Perreault then presented a more detailed review of the company’s operations, including its research and development portfolio, commenting on its previously reported FY19 result which was another strong year of growth:
- Revenue was up 11% at constant currency;
- Net profit after tax (NPAT) was up 17% at constant currency, slightly ahead of guidance; and
- The total annual dividend was up 18% in A$ terms to $2.65 per share
FY20 Guidance
What may have pleased investors is the commentary regarding the outlook for FY20. Specifically, Mr Perreault reaffirmed the guidance he provided in August, which was for CSL’s NPAT to be in the range of approximately $2,050 to $2,110 million on a constant currency basis.
He also said:
- We expect strong demand for our plasma and recombinant therapies to continue;
- As we disclosed in June this year, there will be a one-off adjustment on the way we recognise albumin sales arising from the transition to a our own distributor model in China;
- We also expect to see a slight increase in margin arising from product mix shift; and
- We expect Seqirus to continue to benefit from its product differentiation and process improvement and to deliver in line with prior guidance.
Is The CSL Share Price A Buy?
I think CSL is one of the best managed and highest quality healthcare companies on the ASX. Unfortunately, the share price already reflects this. Investors are willing to pay a premium for such a high quality business, which means CSL shares rarely, if ever, appear cheap.
For me, it’s one of my favourite buy and hold shares and I expect to be holding onto my CSL shares for many years to come. For those that don’t want to pay the arguably high price CSL shares trade on right now, you may be instead be interested in one of the proven, dividend-paying shares in the free report below.
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Disclosure: At the time of writing David owns shares in CSL.
