FPH - Fisher Paykel Healthcare.

[Hoop]

FPH dropped 5.5% this morning on the news that it increased profits by 76%

It seems the market has priced in today that FPH was previously too expensive.

Reading back on this thread for this year it had been mentioned by many posters that FPH was an expensive share and the shareprice was showing weakness.

The confirmation of report released today, FPH was market re-rerated.

It seems in times of Bear cycle environment a PE of over 30 requires tremendous perceived growth, the combination of +76% profit growth increase now and a forecasted +25% growth going forward is seen by the market as obviously not enough to hold the PE of over 30 any longer.

My back of the envelope calulation is that PE is now about 24....is this level about right for FPH?
..or is there others factors in play I have not mentioned and/or the high PE is not the only major issue?

[LJB]

Did the market expect better?!!!! One of the few companies willing to forecast growth, an amenable exchange rate, co-domination of their market, good management and a truly outstanding result for 08. IMHO if ever a company can justify a high PE ratio in the present market, FPH can.

[Rif-Raf]

If the historic PE of 32.7 as shown on DB website is correct (at $2.88) based on the latest result this must now be 18.6 and then going forward to 14.9 in a years time.

[upside_umop]

Seeing no action on this thread even though share price is up this year .... a rare event ..... I thought I'd post this from smokin cubans from another thread -

If you buy FPH you will double your money in a year - NPAT tripling this FY, 20% constant currency rev growth, resilient industry, corporate activity in the sector (Philips acquisition of Respironics). Its a no brainer - stop fluffing about with this ****.(Nuplex)

Agree with him ....

This is where things have changed. If constant currency revenue growth had stayed at 20% I think the market would have been pretty happy...but it hasnt. Down to 10% growth in USD terms --> USD is their constant currency.

[Bob Marley]

Rif-Raf, Hoop

Historical FY09 PE = 23.7x ($2.90 share price/($62.2m net profit/509.6m shares))
Forecast FY10 PE = 18.5-19.7x (based on company's forecast FY10 net profit of between $75-80m)

[ratkin]

Good little story on three news about fph . Seems its the guidance the market dosent like. good opportunity to top up imo

[Yossarian]

gosh, what's up with FPH - suddenly at a two year high, out of nowhere in the last few weeks.

was the technical briefing session on the 30th really exciting??

[emearg]

The share price at a high is surprising considering how high the dollar is right now. Based on the past few months I would expect the share price to be about 50 cents lower right now. So either this stock is being looked on more favourably, or the market in general is feeling positive. Both are in play me thinks...

The good news is that if/when the dollar falls the share price should go considerably higher.

With the consistent revenue growth FPH displays in US dollars there is no reason to think this won't be an excellent long term share. Nice defensive stock in my opinion. Sick people need treating even when they are suffering financially. The only significant downside is the exposure to the dollar.

[ratkin]

Everything is going up and its still a dollar off where it was two years ago.

[Zaphod]

A VERY rapid rise. Keeping my eye on this one.