Opinions
Cameron Hurst
Amerisourcebergen Corp
ABC-N
COMMENT
May 20, 2016
Stock price when the opinion was issued
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(A Top Pick April 4/16. Up 4%.) Part of the fallout from the healthcare situation in the US. Trading at very mid-teen multiples, much less than what the market is trading at. Also, this is partially owned by Walgreens (WBA-Q) who got the contract away from CVS (CVS-N), so there is going to be an extra 40 million prescriptions going to be written that Amerisource is going to take advantage of. He is going to continue to Buy more.
One of the three major US drug distributors. Partnered with Walgreens to buy drugs from manufacturers in bulk, then sell to pharmacies and hospitals at profit. Trades at a low multiple. The industry has challenges: generic pricing has been soft and declining, but that's stabilizing now to ABC's margins. ABC has the highest exposure among its peers to specialty pharmaceuticals which are growing faster at higher margins. Their contracts are set through 2020. (Analysts' price target $103.87)
Amerisourcebergen is driving innovative partnerships with global manufacturers, providers and pharmacies to improve product access and efficiency throughout the healthcare supply chain and enhance patient care. as the leader in global sourcing and distribution, we source and distribute brand, generic, specialty, otc pharmaceuticals and other healthcare products. we increase the effectiveness and efficiency of your supply chain by ensuring products are delivered securely, consistently and cost-effectively, improving product access for pharmacies, providers and patients. our pharmacy solutions result in greater operational efficiency, cost control, growth opportunities and patient safety. our provider solutions drive operational efficiency, financial performance and improve quality of care. our manufacturer solutions maximize success at every stage of the product lifecycle. amerisourcebergen. where knowledge, reach and partnership shape healthcare delivery. Social media mentions are up 200% in the past 24h.
A big drug distributor. Part of the problem is drug pricing, and generic pricing has become a bit of a political issue as well. Have a sustainable and growing dividend, but now it is in a situation where even if management gets it all right, there is a huge investor turnover to work through before starting to make your money back. He tends to avoid these because the return over time is not very good.