Questor share tip: AstraZeneca is a long term buy AstraZeneca £34.59-11p Questor says BUY Sleeping giant Shares in FTSE 100-listed pharma giant AstraZeneca could double in price during the next five years. What's more, investors get paid to wait for a recovery as the shares currently offer a 5pc forecast dividend yield. There is not much growth anticipated in the dividend, but it is covered almost two times by cash flow and earnings per share. Questor thinks investors are wrong to write off the group that was formed in 1999 by joining the 100-year-old Swedish pharmaceuticals group Astra with Zeneca Group, the medicines arm of the great British chemicals conglomerate ICI. Dancing on a cliff edge Pharma companies generate income from new drug discoveries. AstraZeneca has a problem in that its stable of drugs is getting old. Patents run out on drugs that are old, and then cheap copies, or generics, can be made, which damages sales and lowers the price, the so-called patent cliff. In Astra's most recent update, sales were down 4pc and pre-tax profits down 22pc. Sure, the transition between old drugs and new has been mismanaged and the company is now paying the price. But action has been taken and, like all things, drugs discovery runs in cycles. Positive new focus The company has reorganised research efforts to target breathing problems, heart disease and cancer, which are all health issues associated with an ageing population. The group has 15 drugs in the final stage, phase III, of clinical trials and also has a collaboration on new diabetes drug discoveries with US company Bristol-Myers Squibb. The pessimistic view of long-term decline at Astra looks overdone. Analysts at Liberum Capital estimate new drug discoveries could replace $4bn (£2.4bn), or 17pc, of current total group revenue by 2019. There is risk here, but it looks priced in. Shares look cheap Analysts" estimates look far too gloomy. They forecast revenue to decline every year for the next five years, and pre-tax profits to fall by a quarter during the same period. AstraZeneca doesn't have to do much to beat those expectations. The shares are also cheap relative to sector peers, currently trading on 11 times forecast earnings, rising to 12 times next year, which is more than a 20pc discount to GlaxoSmithKline and Shire. The recovery won't be quick but the inflation-busting dividend, on a 5pc forecast yield, will keep you company.