SIG - Sigma Healthcare

[UMike]

Good to see they're continuing to get their receiveables in order. They used to pretty much fund all their customers. I think it's probably still too early to get too excited though, especially with more PBS price changes coming.

Excited ain't quite the word.

Very relived. Lucky I bottom picked this..... But not as much as I would of liked.

Got the majority out 61c and 64.5c

If it drops below 57.5c I'd be very reluctant to pick any more up.

Dunno why I didn't sell the lot. Very interesting story for sure.


You'd think this would be "speeding ticket" material?????

 

[pixel]

It's been a slow grind over recent years, but SIP's trend shows successive higher Lows, and I'm also noticing the last Highs increasing.



Even more intriguing is last week's Dragon Fly doji, the likes of which seem to be followed by more rises. See August 2011, January 2012, and several more.

SIP came to my attention in today's Market Scan, which suggests some accumulation after a "purposeful" price decline. Not on yet, and I'd prefer the higher trendline to be broken before committing. That's what alerts are for.

 

[Garpal Gumnut]

Thanks pixel,

I've made and lost more money on SIP and it's monster father SIG than I care to count.

I'll keep an eye on it.

Chart looks promising.

gg

 

[ROE]

what have we here...I like the new restructure and balance sheet much much better than the old SIP..never own the old SIP....

decent dividend and prospect of maintain and increase dividend is high that seal the deal....and I like management proactively exercise their capital allocation by buying back shares when it's nice and cheap ...short term cash drain for massive long term gain....
just as simple as that no need for fancy formula

when I like something I like to buy... I hop on board not long ago.
sit back and sip coffee and enjoy dividend twice a year

 

[Garpal Gumnut]

Thanks pixel,

I've made and lost more money on SIP and it's monster father SIG than I care to count.

I'll keep an eye on it.

Chart looks promising.

gg

what have we here...I like the new restructure and balance sheet much much better than the old SIP..never own the old SIP....

decent dividend and prospect of maintain and increase dividend is high that seal the deal....and I like management proactively exercise their capital allocation by buying back shares when it's nice and cheap ...short term cash drain for massive long term gain....
just as simple as that no need for fancy formula

when I like something I like to buy... I hop on board not long ago.
sit back and sip coffee and enjoy dividend twice a year

Thanks

I will keep an eye on SIP.

The 3 year weekly chart is informative.

If it breaks previous high at about 0.78, I may be induced to hop on board again.

As for fundamentals, it is in a tough market, a dividend today, may disappear on the morrow.

gg

 

[tinhat]

Pharmaceutical distribution, especially the generic products, might be one of those markets where the margins are so low that the existing distribution channels and contractual/compliance channels of incumbents such as SIP provide a sufficient defensive moat. With the massive destruction of shareholder value that occurred in the GFC I've never looked into SIP but it could be a defensive income earner?

 

[ROE]

Pharmaceutical distribution, especially the generic products, might be one of those markets where the margins are so low that the existing distribution channels and contractual/compliance channels of incumbents such as SIP provide a sufficient defensive moat. With the massive destruction of shareholder value that occurred in the GFC I've never looked into SIP but it could be a defensive income earner?

There is more to the new SIP than just generic drugs, buy the time the market see it
it's doing a bunnings......

The new management is very focus and know where to target high margin area...it may not show up for a few years but happy to collect 6% dividend while I wait and I can almost be certain dividend can be maintained

 

[McLovin]

The new management is very focus and know where to target high margin area...it may not show up for a few years but happy to collect 6% dividend while I wait and I can almost be certain dividend can be maintained

What are they targeting? I'd be interested to know because they've been such a low margin, wc intensive business for years (a few years back a shareholder could easily have wondered if the business was being run to enrich pharmacists!). I'd be interested if they could start getting paid sooner, 75 days is a bit rich.

API, Clifford Hallum, SIP they all seem to suffer the same problem, they're getting spitroasted ('scuse the French) by their suppliers and their customers.

 

[tinhat]

There is more to the new SIP than just generic drugs, buy the time the market see it
it's doing a bunnings......

The new management is very focus and know where to target high margin area...it may not show up for a few years but happy to collect 6% dividend while I wait and I can almost be certain dividend can be maintained

SIP is due to report this Thursday. I'll be interested to read the report. Just a question - what is preventing Woolworths or Wesfarmers from entering the pharmacy market? I seem to recall that there is some regulatory ban against them contesting this market?

Share price is sitting on a very long term support level at 62c.

 

[McCoy Pauley]

SIP is due to report this Thursday. I'll be interested to read the report. Just a question - what is preventing Woolworths or Wesfarmers from entering the pharmacy market? I seem to recall that there is some regulatory ban against them contesting this market?

Share price is sitting on a very long term support level at 62c.

Legislation prevents Woolies and Coles from entering into the pharmacy game. Woolies tried to break the monopoly of the Pharmacists' Guild a few years ago and lobbied the Commonwealth Government hard to have the law changed to allow supermarkets to set up pharmacies inside their stores, but the Pharmacists' Guild is a very well-connected industry lobby group and successfully convinced the Government that their interests (and I use that phrase loosely so everyone can draw their own conclusions) would best be served by the status quo.

Accordingly, Howard and Abbott (then Health Minister) caved and canned Woolworths' proposal to trial in-store pharmacies in five stores.

This would have been 10 years ago.

Alan Mitchell wrote about the issue about 12 months ago, urging Julia Gillard to change the laws, but of course nothing happened (http://www.afr.com/p/opinion/prescription_for_savings_4DSByEpIww0fJWpL0sXPHM), and given that Abbott apparently pledged his support for the industry prior to the election, still nothing will happen (http://www.pharmacynews.com.au/news/latest-news/coalition-s-letters-of-support-reassure-guild). Like the ridiculous prices Australians have to pay for software, it looks like Australians will have to pay ridiculous prices for drugs, unless the drugs are subsidised on the PBS (which as its own issues, as Brian Toohey never tires of pointing out, though it seems nobody listens to him).

 

[skc]

Alan Mitchell wrote about the issue about 12 months ago, urging Julia Gillard to change the laws, but of course nothing happened (http://www.afr.com/p/opinion/prescription_for_savings_4DSByEpIww0fJWpL0sXPHM), and given that Abbott apparently pledged his support for the industry prior to the election, still nothing will happen (http://www.pharmacynews.com.au/news/latest-news/coalition-s-letters-of-support-reassure-guild). Like the ridiculous prices Australians have to pay for software, it looks like Australians will have to pay ridiculous prices for drugs, unless the drugs are subsidised on the PBS (which as its own issues, as Brian Toohey never tires of pointing out, though it seems nobody listens to him).

I spoke with a pharmacist friend the other day. He's saying that it's a tough gig out there for an independent pharmacy. The margin on drugs are quite thin, and margin on retail are razorthin. They are screwed on payment terms and there are going to be PBS changes that will on average reduce income by $90k per store.

He also mentioned that it's a mis-conception that Australians pay more on drugs... he said while that is true for some common drugs, the truely expensive drugs (the ones that cost over 5 figues) are made very affordable by PBS. So in value-weighted terms drugs are not overly expensive.

The other thing he mentioned was that, with these super-expensive drugs, the pharmacy puts up the money to buy it first, and it's 10 days before the government's payment come in. The out-of-pocket payment by the patient is only low, so really it just locks up working capital with very little in return.

(Sorry I can't be more clear as it was a conversational conversation so I am struggling to recall full details).

 

[pixel]

After going sideways for 2 months, Sigma seems to have finally found some strength to break the barrier.



Compared to its sector, XHJ, it's doing remarkably well, enough for me to buy a few.
Stop if it closes below 60c, although I wouldn't mind if the gap to 59.5 was closed Intraday.

 

[Garpal Gumnut]

Thanks pixel,

I watched SIP on Friday after your post, decided not to get involved, mainly because of the general recent pessimism about the XAO.

Well bought!

I may change my mind tomorrow, volume and RSI seem promising, but worry it may be a Sept 13 rerun, when it promised to break higher then plateaued and continued down.

A good post. Thanks.

gg

 

[Garpal Gumnut]

Where to from here with SIP.

The XAO looks set for a leg up.

Will SIP follow?

gg

 

[pixel]

Where to from here with SIP.

The XAO looks set for a leg up.

Will SIP follow?

gg

Today, SIP seems to buck the trend and move North.
Maybe I've set the alert @70c a tad too high, but when it fired, I started buying again.



good early volume as well.

 

[VSntchr]

Since the budget was released last month, Primary and Sonic Healthcare have been suffering on the basis that GP co-payments will reduce patient numbers and flow-on business for pathology etc.

It seems that SIP is bucking the trend after today nudging 80c, despite being in a business which is similarly affected by GP flow-on volumes of clients.




- FWIW, I think the impact of the GP co-payments is being a tad exaggerated - both by the public, and by the investment community. But that's perhaps for another thread.

 

[galumay]

It seems that SIP is bucking the trend after today nudging 80c, despite being in a business which is similarly affected by GP flow-on volumes of clients.

I happily hold, bought in October for 57c, up about 36% and a nice divvy to boot! My best performer in the portfolio to date.

 

[pixel]

I think the impact of the GP co-payments is being a tad exaggerated - both by the public, and by the investment community. But that's perhaps for another thread.

I can't argue with that - especially since the legislation is still very much in limbo and may not even become Law.
But when I look at PRY and SHL, I reckon the investment community is really scared it may indeed come true. Now, SIP and API are in a different situation: Patients may not visit their GP as frequently as before, but the pills they need are far less under threat. So, even if they visit their doctor less often, they can still "bundle" prescriptions and ask for 3 or four scripts at one visit, rather than going twice as often for one or two.

From yet another angle, looking at today's Shooting Star candle (which is a highly reliable Top Reversal Doji) makes me suspicious that wouldbe profit takers may have created a little rally, so they can sell at a higher level.

 

[ROE]

SIP going from strenght to strenght with the latest aquisition

I foreshadow this a while ago when I bought this baby cheap, and by the time the market see what is going on with SIP it already bolt ... time to grow again

 

[galumay]

SIP going from strenght to strenght with the latest aquisition

I foreshadow this a while ago when I bought this baby cheap, and by the time the market see what is going on with SIP it already bolt ... time to grow again

Yes, i seem to remember you helped me with my decision to include SIP in my portfolio, its subsequently been one of my best performers.