International Medical Devices Share Discussion Threads

[keyboard] 03/7/2003 20:44

From today's "Independent":

Still hidden value in Intercare

A profit warning from Intercare yesterday and another reminder that its drug distribution business is holding back the group as a whole, which is now trying to focus on the business of manufacturing pharmaceuticals.

Although two-thirds of the little group's turnover comes from distribution, this low margin business accounts for less than 40 per cent of profits. Intercare supplies generic drugs (that is, unbranded drugs where patents no longer apply) to pharmacies in the UK. And it dabbles in "parallel importing", taking advantage of free trade laws to buy branded drugs in European Union countries where they are cheapest and ships them into the UK. The business has been hit, Intercare said, by the rising euro (in which it pays for the products) against sterling (in which it sells them).

Parallel importing is a practice that infuriates the giant drug companies, although Intercare insists it has a grown-up relationship with such companies, who are important partners in other areas.

Intercare's manufacturing division is growing at some 10 per cent a year, thanks to contracts to make drugs on behalf of Big Pharma and thanks to its own customised drugs. A share price of 131.5p gives a market value of £109m which means there is hidden value here. Hold.

[wrisnr] 02/7/2003 10:39

NJP
Good man !

[njp] 02/7/2003 10:31

wrisnr

Thnaks for the advice, but I'm monitoring, not invested. There will come a time when this share will come back and I plan to be in when it does. Until then, my money's elsewhere.

[wrisnr] 02/7/2003 10:23

NJP
OK mate as you please but when you are sitting there with this thing idling away waiting for people to regain their trust in the company others will be off making money.
I know you post on the DCM board - look at the difference in price performance !

[njp] 02/7/2003 10:17

No, wrisnr. Still too pessimistic for me. If you'd said 90p to £1 I wouldn't have been so sure, though!

[wrisnr] 02/7/2003 10:13

NJP
Believe the 70p now !
Wait for it to bottom conclusively before you jump in - it may slip much lower than you think is reasonable.
Buy when you are convinced its bottomed and is showing clear signs of recovery - not before !

[njp] 02/7/2003 09:22

PUG

Still reckon manufacturing will make 14p this year. So maybe they'll be 5p off. In the range 14p to 17p? As you say, not very transparent, though.

[pugugly] 02/7/2003 08:23

Profit warning as expected:- Marked down to 117/120 now recovered to 128/133. A bit of a curate's egg and about as transparent. Anyone lioke to hasard a guess by what is meant by "At Group level therefore we anticipate that profits for the full year will be somewhat lower than the current consensus of analysts' estimates" Current consensus ex refs 2003 eps 21.6p.. .

[njp] 01/7/2003 23:32

wrisnr

Would love to snaffle up INT below £1 but I'm not betting on my chances. INT is out of favour for now, but I still reckon eps for the year will surprise the doubters. May take a year but I'd be very surprised not to see INT back above 200p sometime in the next 12 months. To me that's a prospect of both good capital gain and the welcome bonus of more in divvies than I'd get in the bank.

All a matter of timing and bottom sniffing though. Not expecting a great H1 as we've been warned on that, so not jumping in. Will do it in stages.

PS - Manufacturing ought to be on track for 14p eps alone this year. Puts your 70p on a PER of just 5 for the manufacturing division profits alone. Can't see that happening.

[wrisnr] 01/7/2003 21:04

NJP
I know you from the DCM board !
This company no longer viewed as a 'growth' company.
Now only attractive for a dividend.
I can get a bigger yeilding and faster growing dividend than is available here.
Hence the share price and my capital value will grow faster too.
Only thing which would attract me here is a premium substantial enough to attract me away from those other shares.
On that basis I may be tempted at about 70p which also happens to be the long term support line.

[njp] 01/7/2003 19:39

You'll be lucky, wrisnr! Any science behind your rash prediction?

[wrisnr] 01/7/2003 16:52

70p bottom !

[njp] 28/6/2003 00:04

boadicea

Nothing there of particular interest. Latest poster doesn't reckon on INT, but concentrates on the distribution side too much, forgetting that manufacturing already accounts for 60%+ of profits and is doing well. That's 14p eps or thereabouts already in the bag!

Interestingly, The TA experts on the PBB traders thread reckon that yesterday was a selling climax possibly indicating a bottom. One trader there is long already and another is watching for confirmation.

[boadicea] 27/6/2003 13:37

Thanks NJP.
Some interesting trades showing. They seem to come in blocks of buys or sells over a short space of time, presumably triggered by stop-loss or other signals.
Compare particularly today's trade nos 16 and 24!

Does anyone have a view on separate values of the two main business activities?
At current levels one might anticipate the possibilty of corporate actions imho.
Would the distibution side fit with Alpharma (?US owned?)- looking at possible deals? Or perhaps there are other suggestions.

[boadicea] 27/6/2003 11:32

Prem board has item. Anyone with access?

[big vern] 27/6/2003 09:34

bin em...unless there's a take over ? whispers in the air

[huwrayhenry] 27/6/2003 08:34

Big vol yesterday...these are due a technical bounce.
HH.

[leedslad001] 27/6/2003 00:38

by for now off to other boards.

[leedslad001] 27/6/2003 00:36

Not betting on this one i intend to invest.

[wrisnr] 27/6/2003 00:30

Glad you admit that you're just having a bet then - best of luck !

[leedslad001] 27/6/2003 00:19

all ways do when i am spread betting

[wrisnr] 27/6/2003 00:12

The market likes taking peoples money !
Let the trend be your friend !

[wrisnr] 27/6/2003 00:06

Good luck then ?

[leedslad001] 27/6/2003 00:04

£1.22 if i am lucky