Dropped to 1.60 yesterday and then back up to 1.69.
I see this one as mostly more of a retail play at the moment with most of the heavy lifting being done by the pharmacy sector. Obviously the long term play is on the healthcare side in NZ of rising population and also the retiree's.
My rule is to never invest in retail hence I haven't yet got in but tempting it is. Perhaps 1.50?
Dropped to 1.60 yesterday and then back up to 1.69.
I see this one as mostly more of a retail play at the moment with most of the heavy lifting being done by the pharmacy sector. Obviously the long term play is on the healthcare side in NZ of rising population and also the retiree's.
My rule is to never invest in retail hence I haven't yet got in but tempting it is. Perhaps 1.50?
I guess the pharmacies alone are in my view quite inefficient, low (no?) growth and under heavy attack from supermarkets. The stock becomes more interesting if they manage to implement their vision of an integrated health care company, but it looks like the markets don't really believe anymore into their growth strategy. Show us the money - and the SP will take care of itself.
Not sure what it would be worth just based on the old pharmacy brands. One dollar would bring the long term PE (8 yrs) down to 10 ... and if we just take the last 5 years, than it would be even $1.20. Why pay more?
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"Prediction is very difficult, especially about the future" (Niels Bohr)
Must be hard for the smaller pharmacy’s that they still have to pay the govt $5 for every script even if they don’t charge the consumer
They don't have to pay the government ... the article used a particularly strange way to express that the government subsidizes pharmacies in a big way.
The government calculate the retail cost of the medicine. This calculated retail price is high enough to make sure that even the most inefficient and worst run pharmacy in the country still will make a handsome profit.
Given that pharmacies are allowed to charge $5 prescription fee is the government than deducting $5 of this fictive retail price - and pay the reminder to the pharmacy for dispensing the medication.
Any pharmacy working a bit more efficient that the worst run pharmacy in the country makes a steal - and the discounters are prepared to return some of this steal back to the consumer.
Coming from overseas and with the benefit of knowing some different health systems I found NZ Pharmacies always expensive and highly inefficient. Good to see now some competition coming in.
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"Prediction is very difficult, especially about the future" (Niels Bohr)
According to the latest FS, the company makes 8.4% of profit on sales in the pharmacy segment (bottom line). Not impressive at all, and an introduction of a competitor that sells so much cheaper will lead that down.
With the current govt in charge and healthcare being viewed as a public good in NZ, its hard to see this being a home run. Even if it does well, regulation will get it eventually (see pay equity deal).
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