Opinions
John Burke
Amerisourcebergen Corp
ABC-N
TOP PICK
Mar 01, 2017
Stock price when the opinion was issued
You might be interested:
(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.
One out of 5 pills we take are coming from this company. A very well-run company with a terrific free cash flow yield of just under 10%. Very profitable. Reasonably cheap, because healthcare has come under pressure. This is closely related to Walgreens (WBA-Q) which he has recommended in the past. Walgreens is their biggest customer. Dividend yield of 1.6%. (Analysts’ price target is $90.)