Sigma-Aldrich CorporationSIAL

Morningstar Rating

Stock Research and Analysis

by Annie Sorich

Despite near-term head winds, we think Sigma-Aldrich will continue to create shareholder value over the long term.

Sigma-Aldrich is the leading provider of research consumables and supplies to public and private research institutions and companies Read more

Bulls Say

Sigma consistently creates value through its share-buyback program. Since 1999, the company has bought back more than 30% of its shares.

The firm has experienced heady growth in key developing markets, such as China, India, and Brazil, where its top line has expanded at rates of more than 30% during the last few years. These markets will become increasingly important as more firms in developed markets outsource research activities to these regions.

Sigma has lots of room to expand its market share in biotech. Read more

Bears Say

Sigma's revenue growth has benefited from favorable currency effects of late. If the dollar strengthens relative to other currencies, the firm's earnings power could suffer.

Growth in the firm's biotech unit is highly sensitive to the amount of research activity in the academic sector, which has been fairly weak recently because of lower government funding.

Big pharmaceutical companies have been focused on late-stage development and marketing lately. This has resulted in a drop in demand for Sigma's products, which are used most in the initial research stages. Read more

Strategy

The company is focused on maintaining its leadership positions in many of its markets and improving its operating efficiency. Read more

Management

We like the management team's candor and willingness to return cash to shareholders. Jai Nagarkatti was chosen to succeed David Harvey, who remains chairman, as CEO in 2006. We like that senior executives are required to own a multiple of their salaries Read more

Profile

Sigma-Aldrich is a leading producer and supplier of research biochemicals, organic chemicals, and fine chemicals. Sigma's products are sold to universities, government institutions, Read more

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