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AstraZeneca's Prescription for Growth

Stocks in this article: AZN JNJ MRK RHHBY BMY LLY NVO

NEW YORK ( TheStreet) -- Given the Street's insatiable appetite for growth, it's quite surprising that "Big Pharma" stocks have performed as well as they have. And when you factor in uncertainties with eroding pipelines and patent expirations, drug stocks don't appear healthy. And to say nothing about the federal restrictions that will be imposed by Obamacare.

AstraZeneca (AZN) just might be the exception to its rivals that sell at premium but don't deliver a bargain. Unlike several of its peers that have under-invested in their product pipelines, AstraZeneca has spent the past couple of years looking for ways to grow its lifeblood. The result? A stronger pulse. With the stock price up nearly 60% in 18 months, there's no denying management has found the right formula.

[Read: Why J.C. Penney Is Surging]

Investors are justifiably surprised by the stock's performance against severe headwinds. Along those lines, I don't even believe management has gotten the credit they deserve. The question now is, to what extent can AstraZeneca sustain this run in the face of growing competition from Johnson & Johnson (JNJ) and Merck (MRK).

CEO Pascal Soriot has shown more than enough times that he'll find an edge if one exists. Never shy about doing deals, three times last year Soriot pulled out his checkbook, spending roughly $1.5 billion in three separate acquisitions. When it comes to building for the future, AstraZeneca takes a backseat to no one. At the same time as it has also fought slowing growth with strategic cost-cutting measures.

The company will look to extend this winning streak when it reports fourth-quarter and full-year earnings results on Thursday. The Street will be looking for earnings-per-share of $1.22 on revenue of $6.91 billion, which represents a 5% year-over-year revenue decline. If you've been following the sector's performance over the past couple of quarters, you'll notice the revenue trend has been weak and growth has slowed. So that's not where the attention should be placed.

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