FUNDAMENTAL ANALYSIS : ARE THEY THE TOP PHARMA STOCKS???

-


In my last article , I wrote how dangerous the Pharma Industry can be if not analysed properly before making "The Investment" in a particular company and what are the main reasons behind the sudden uprise of Pharma stocks during the covid lockdowns. 

I even stated how a wise investor can get higher returns from " the drugs sector" and reduce the scale of risk and losses from his portfolio by just "analysing the fundamentals of a company thoroughly". 

Therefore, here is the fundamental analysis of the first six companies ( as stated in the previous article)

1. Abbott India : Abbott is a MNC ( Multi National Corporation), already well established in Asia Pacific, Europe, Middle East and South Africa, & The Americas.

The MNC went on establishing its name in India in the year 1990, and is headquarted in Mumbai, Maharashtra. 


1. Managing Director of Abbott India - Ambati Vanu ( September, 2016)
His salary as recorded recently is Rs. 6,50,75,000 p.a. ( the salary of board of directors should not exceed 5% of the net profits, it adds to the unnecessary expenses)

2. The products and services provided by Abbott India is broadly categorized into four main heads : 
a) Nutrition : Similac, PediaSure, EAS, ZonePerfect, Ensure, Glucerna.
b) Medical Devices : Glucose Monitoring Systems, Neuromodulation Devices and Cardiovascular Devices.

 The products include FreeStyle Libra, MitraClip, Confirm Rx, Amplatzer Piccolo Occluder, Heartmate, Xience, CARDIOMEMS, Gallant ICD, Burst DR Technology,  Proclaim DRG Neurostimulation System, Infinity Deep Brain Stimulation System.
c) Diagnostics : Immunoassay Diagnostics Systems, Blood Screening, Bedside Testing and Companion Diagnostics. Products include i - STAT, Alinity, Architect.

d) Pharmaceuticals : Affordable and branded generic medicines to treat pervasive and persistent diseases. 

Percentage of revenue generated from these sources (approximately in 2020) : 
1. Medical Devices - roughly 40%
2. Diagnostics - 38%
3. Nutritionals - 13%
4. Pharmaceuticals - 6%

Notice : In the year 2017, the Medical Devices segment of Abbott India was acquired by St Jude Medical.

In the year 2018, the Diagnostics segment was acquired by Alere.

Abbott Globe has been the sponsoror of " World Marathon Majors " since 2015.

3. Financial Performance ( as compared to June 2019 to June 2020) : Income has increased from Rs 998.89 crores to Rs 1064.27 crores.

Net profit has increased from Rs 116.94 crores to Rs 180.35 crores.

As on 22 August, 2020, the company has a :
* Enterprise Value (actual value) : 
 Rs 33,543.63 crores 

* Debt : 0

* EPS : Rs 308.88

* ROE ( Return on Equity) : 27.09%

* ROCE ( Return on Capital Employed) : 36.54%

* Sales Growth : 11.27%

* Profit Growth : 14.49%

* Promoter Holdings : 74.99%

* Price to Cash Flow : 57.08

* Interest Coverage Ratio : 95.08

* Profit After Margin : 0.93

* Dividend (%) : 2500

* Rights - 1994 (1:10)

* Bonus - 1998 (1:1)

4. Conclusion : The strengths of the company are that the company has mainted a healthy ROCE, ROE, EPS, Profit growth and is virtually debt free.

The weakness of the company is that the company is quite overvalued.

This company has remained high in the picks of brokers and investors.

Pfizer : Pfizer is an American MNC established in the year 1849 ( Multinational Corporation)  and its main headquarters are in New York City.

It serves people Worldwide and in India it started in the year 1950 and is headquarted in Mumbai, Maharashtra. The main focus of the company is to provide medicines even to the remotest areas of each country.


1. Managing Director : Mr. S. Sridhar
Salary : Rs. 3,55, 26,571 p.a. ( salary of the board of directors should not exceed more than 5% of the Net Profit)

Subsidiaries of Pfizer :
1. Pfizer Manufacturing 
2. Wyeth Ltd
3. Pfizer Manufacturing Holdings Cooperatief U.A.
4. Alpherma Ireland Ltd.
5. Pfizer Suzhow Animal Health Private Ltd.


2. The products and services provided by Pfizer India are broadly categorized into three main heads : 
a) Pharmaceuticals and Drugs - The company has shown innovative breakthroughs in a number of areas including depression, erectile dysfunction, high cholesterol, HIV infections, hypertension, bacterial infections, and systematic fungal infections.

Pfizer brands include Advil, Bextura, Celebrax, Diflucam, Lyrica, Robitussin, and Viagra.

b) Nutritionals and Consumer Healthcare - 
Consumer care products include protein supplements like Proteinex and other products are Listerine Mouthwash, Benadryl cough, etc.

c) Animal Health Products - The company in this segment has products named Vanguard, Bayrocin, Nutrimilk etc.

Revenue generated from these segments      ( approximately in the year 2020) : 
1. Essential Health ( pharmaceuticals and animal health mainly ) - 40% 
2. Innovative Health ( consumer care products mainly) - 60%

Notice : In the year 2018, Consumer Healthcare division of Pfizer was merged with UK based giant GlaxoSmithKline. 

In the year 2009, Pfizer faced a huge penalty of $2.3 billion, one of the biggest pharmaceutical scams ever.


3. Financial Performance (as compared to June 2019 to June 2020) : The Total Income of the company has decreased from Rs. 580.23 Crores to Rs. 532.09 Crores.

The Net profit of the organization has increased from Rs. 112.81 Crores to Rs. 124.45 Crores.

As on 22 August, 2020, the company has a * * Enterprise value - Rs. 18,818.35 crores

* P/E - 40.39

* Dividend Yield - 7.18%

* Debt - Rs. 2.50 crores

* Promoter Holdings - 63.92%

* EPS - Rs. 113.84

* Sales Growth - 3.37%

* ROE - 15.89%

* ROCE - 20.38%

* Profit Growth - 23.66%

* Debt to Equity Ratio - 0.00

* Price To Cash Flow Ratio - 65.09

* Interest Coverage Ratio - 59.36

* Profit After Margin - 0.78

4. Conclusion - The strengths of the company are that it has zero promoter pledge, low debt, increasing profit margins and obviously the increased growth year after year.
The weakness of the company is that it ks trading on a high PE.

Regards,
Ankita Gupta ❤
Connect : Connect

DISCLAIMER : The information provided in this piece of article is for educational purpose only. These are not stock recommendations of any kind. Pleae read all the fundamentals of the company and analyse it properly before making any investment. 
 





Comments

Post a Comment

Popular posts from this blog

INVESTMENTS in PHARMA SECTOR can make you a BEGGAR ??

-
Image
If you are investing in the pharmaceutical industry just with the belief in your mind that " this sector will grow in and after Covid Pandemic ", then you are indeed going to be a beggar. We have seen a sudden uprise and growth in the industry concerning medicines since the past few months.  After the coronavirus lockdown which was approved " worldwide" , this was greatly shocking and confusing to the investors. Where all the industries were closed and production was stopped completely for the first few months, the analysts saw a greatest downfall in the Nifty and Sensex after The Great Depression.  However, the pharma index continued to rise for a few hundred points even in the most severe situations. This forced the investors to believe the pharma companies rising in the pandemic to be " fundamentally so strong to beat the extreme situations " . This belief was totally wrong and the growth of this particular sector was only due to the followi...
Read more

YOU CAN EARN UPTO $4,30,000 PER ANNUM FROM "THESE JOBS"

-
Image
You can earn a maximum of $4,30,000 from these "JOBS" . According to the US Bureau of Labour Statistics (BLS), these ACTIVE INCOME SOURCES are the highest paying in the world  and you just need "those right qualifications" and "the right experience " to achieve them. ARE YOU READY TO TO EXPLORE THE LIST?? (Today's blog gonna be really interesting #wink ) Here goes the list: 1. Anesthesiologists ( you just had problems pronouncing the word, didn't you? If we cannot pronounce it, god knows how we will become one!!)  -- A anesthesiologists is a person who is a doctor (MD) and knows how to plan and administer an anesthesia in a patient's body to prepare him for the surgery. (Sounds complicated and not easy, don't loose hope!!! We have 9 more in the list) 2. Surgeon -- A surgeon is a doctor with greater number of degrees and and more experience in the medical and ofcourse, he is the one who carries out surgeries, ...
Read more

DO YOU WANT TO LIVE A LIFE WITHOUT BOTHERING ABOUT YOUR MONEY ??

-
Image
Do you want to live a life where you don't have to worry about money and your expenditures? A life where the things termed as " expensive " for the rest becomes cheap for you?? Let me tell you ... if you are able to achive it then you will ultimately open your path towards " living "  your life happily with " 99.99%" of problems sorted. In order to attain " financial freedom ", you need to plan your finances well. If you are thinking that you can rely on your one income source which is your job, then let me tell you, you are just a step away from " poverty". HOW?? Well, renowned American businessman and educator, Robert kiyosaki puts forward the answer giving a small example. He explains to his listeners that how is that the   rich are getting richer, day by day and poor, poorer. Something which he learnt from his " rich dad"  when he was only 9 years old. Mr. Kiyosaki explains that everything is in the mind. T...
Read more