Garpal Gumnut
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CSL - CSL Limited
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Dona Ferentes
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There's an interesting article on CSL in today's AFR. Essentially, the company is a logistics and distribution business with a side hustle in medical tech. High end, cutting edge tech but with predictable costs in development stages, and a pot of gold if they win and bring to market new drugs. The biggest aspect is Plasma collection, an exercise in execution, cost per unit focus and keeping the blood flowing, so to speak.
www.afr.com
Inside CSL’s plasma powerhouse of liquid gold
Blood Money | Plasma is the oil that keeps the $145 billion giant global machine running, helping to deliver a 10-year total return for investors of 436 per cent.
UMike
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Maybe this Chart will ring true!
Dona Ferentes
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Wow. Is that sarcasm?
Dona Ferentes
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The AFR article highlights how CSL has managed to bypass uber
...CSL had set up a meeting every Thursday about a year before COVID-19 was on the world’s radar, when 40 key staff would come together for 45 minutes to get a detailed update on supply chain issues.
The meeting was called “Reliability Room” and still operates. The call is so important Deem says it takes precedence over everything, bar a call with the chief executive.
“There is very little that can happen in this organisation that would keep me from being on that call every Thursday morning. Probably short of a call with the CEO,” Deem says. “And the CEO understands the importance of that call, so nine times out of 10, he would tell me to forego the call with him and be on the reliability call.
“It’s made up of commercial people around the globe, manufacturing people around the globe, quality people around the globe, regulatory people around the globe, R&D people around the globe, it touches about every function within the company.”
Most of the time people are just listening. “Most people aren’t talking,” he says. Metrics are shown about overall supply, and questions are asked about “potential smoke signals”.
Deem says the communication it creates across the business is what makes CSL’s supply chain so unique.
.... and that's how a business can stay profitable. In order to fund the R&D. Which I had no idea about before being informed.
...CSL had set up a meeting every Thursday about a year before COVID-19 was on the world’s radar, when 40 key staff would come together for 45 minutes to get a detailed update on supply chain issues.
The meeting was called “Reliability Room” and still operates. The call is so important Deem says it takes precedence over everything, bar a call with the chief executive.
“There is very little that can happen in this organisation that would keep me from being on that call every Thursday morning. Probably short of a call with the CEO,” Deem says. “And the CEO understands the importance of that call, so nine times out of 10, he would tell me to forego the call with him and be on the reliability call.
“It’s made up of commercial people around the globe, manufacturing people around the globe, quality people around the globe, regulatory people around the globe, R&D people around the globe, it touches about every function within the company.”
Most of the time people are just listening. “Most people aren’t talking,” he says. Metrics are shown about overall supply, and questions are asked about “potential smoke signals”.
Deem says the communication it creates across the business is what makes CSL’s supply chain so unique.
.... and that's how a business can stay profitable. In order to fund the R&D. Which I had no idea about before being informed.
Yep.
The products in various clinical phases are really CSL's future bread and butter. Then there are matters yet to even reach that stage. Not all will reach market or get to trial stage.
Dona Ferentes
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CSL today updates investors on the impact of foreign currency movements on the Company’s fiscal year (FY) 23 forecast profit. CSL now expects a foreign currency headwind of ~USD $230 million to $250 million, up from USD $175 million anticipated at the time of the half year result.
Constant currency profit guidance for FY231 remains unchanged, albeit now skewed to the top end of the range.
CSL also notes the broad range of published analyst profit projections for FY24. Following finalisation of next year’s budget, CSL advises NPATA is expected to grow ~13 to 18% to ~USD $2.9 billion - $3.0 billion at constant currency.
... might be a bit of s/t pressure
Constant currency profit guidance for FY231 remains unchanged, albeit now skewed to the top end of the range.
CSL also notes the broad range of published analyst profit projections for FY24. Following finalisation of next year’s budget, CSL advises NPATA is expected to grow ~13 to 18% to ~USD $2.9 billion - $3.0 billion at constant currency.
... might be a bit of s/t pressure
m
Where they could once pick up growth stocks at a reasonable 10 times earnings , these days it's more likely to be for 35 times.
It doesn't seem logical for growth to continue at that rate , but what can you do ? Bit of a dilemma for me.
Just have to cough up the dough and hope for the best. Not wise investing ,though , is it?
Mmmmm, Warren Buffet and Charlie Munger have been banging on about this for years, when trying to explain/ excuse ( ? ) their mighty cash reserve.
Where they could once pick up growth stocks at a reasonable 10 times earnings , these days it's more likely to be for 35 times.
It doesn't seem logical for growth to continue at that rate , but what can you do ? Bit of a dilemma for me.
Just have to cough up the dough and hope for the best. Not wise investing ,though , is it?
Dona Ferentes
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...looks like the ' broad range of analyst profit projections ' all jumped out, when the spreadsheets said so, this morning.
Crowded trade. Same company.
Knobby22
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The earnings have dropped because the expected reduction in paying people for plasma has not occurred as planned and the volatile currency environment. Both those can move the other way in the future.
The new vaccine plant in Melbourne will be running in 2026. Also by then the development pipeline will be further along with more releases. I reckon in 2026 we will all be saying should have bought but at the moment I think the price could definitely drop more. It is still pretty pricy. Looking much better value at present price of $279.86 though.
According to analysts on Bell Direct around 10% growth expected this year now with about 30% next year. PE ratio at present is about 40 (35 forecast this year). would prefer to pay less than that. I see that all the 10 analysts have CSL as a buy or strong buy.
That sure was a steep drop on the share chart , Tuesday . I can't read a chart to save my life , but my guess is , that it ain't gonna recover , all of a sudden. Insto's maybe thinking the same thing , I have no way of knowing.
Instead of jumping in yesterday , I'll continue to hold my nerve , sitting on a lowball bid .
There were only 5 other bidders at my price yesterday but today : 10 times that number lined up behind me.
All mums and dads by the look of it. Volume , wise .
Instead of jumping in yesterday , I'll continue to hold my nerve , sitting on a lowball bid .
There were only 5 other bidders at my price yesterday but today : 10 times that number lined up behind me.
All mums and dads by the look of it. Volume , wise .
Dona Ferentes
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Cursory look to see where CSL trades, other than ASX primary listing. I take the morning drops as rebalancing from overnight selling of ADRs on other exchanges.
I'd expect the deepest liquidity is in Oz, so three in a row down makes it look like instos haven't found new level just yet.
DrBourse
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May as well butt in again on the CSL conversation.
IMO, Irrational Exhuberance has always ruled CSL.
IMO CSL was Overvalued back on 17/12/21 when their SP was at $273.00, their IV at that date was $176 to $215.
As at today 17/6/23 the CSL IV is well below $200,
So IMO another two 10%+ drops are well overdue.
The sheep notice that someone sneezes, then within a short time the sheep hear that CSL has developed a vaccine or whatever, So, then the the Expert Brokers an Analysts of the world issue rave reviews, so the sheep do what sheep always do, they chase the SP up to ridiculous heights.
Then a few months later the whole process repeats.
CSL are only doing their job, so the Analysts should not be ramping the stock for just doing their job.... Grrrrrrrr..
Crawling back into my cave now....
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Yes, I noticed at the 30 th May Shareholder Briefing , CSL was particularly cautious in not wanting to guild the lily a bit .
They have obviously drawn a few lessons from previous disappointments on the research side.
Dona Ferentes
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Approximately 95%+ of all research ends up in a dead end and never even reach clinical trials. However, you never know if it is a dead end unless the research is done. A fair amount of funds are burnt as a consequence of this necessary requirement.
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