Hey SIP people. As the dividend is behind us, I'd been wondering where SIP might land. I feel we're yet to find a landing place, or a "resting place", as I call it, where one can see what the market will pay- all things being equal- and with no "events", either good or bad. I think that 39c is merely the starting point. I have this figure because SIP has fallen twice in the past 6 months- to 39c, on very poor news. The Pfizer decision and the mini-correction we had, saw us fall those levels, or thereabouts. As efed has said, the past profit downgrade, more than 6 months ago, and the Pfizer decision around Christmas, have been factored in. 39c was our "punishment" price. What has occurred after punishment after those events? The price has risen.
I've been a little dismissive of FA (even though it's been very good FA!) because the market always decides everything, and I've seen many companies (and heaps of my own) fall to pieces in SP even with good fundamentals. What I've been noticing though with SIP, at post-dividend time, is the strength of buying. It seems the market is "reaching", and we've gained around 9% since ex-dividend. I'm starting to think we will "pass" dividend (is that the term?) and why not! If the dividend was priced in, it wouldn't be much of a reward.
The NTA of SIP was 14c in 2010, and is 69c in 2011, or 54c without the dividend (Results, 23/3/2011). We have almost *quadrupled* our NTA!) We have management in Mark Hooper that seems sensible, conservative, and mercifully, has not been publicly sticking the boot into API, as some poorer MD's might do, and have done, in other companies. We're winning market share of pharmacy supply, and may gain $600m in tender. Heaps of other good stuff, too, as laid out by our FA people.
I'm calling 39c as the bottom. GC, if you thought 35.5c looked poorly, 36c is looking positively wan (it'll change on Monday, but it looks good on Sunday):
http://cb.iguana2.com/netwealth2/depth/sip
Please, SIP holders, feel free to disagree with, or pull apart, any of the above. I just don't believe the market is finished with buying our share yet. At 36c, we're almost at yearly lows, but our results show we should be more like at yearly highs. Maybe it's not just funds buying, but a larger market, where sentiment is changing towards our share. From a buy/sell perspective, I reckon there'll be real health and no overhang when the selling columns all contain about <600k.
Anyhoo, looking forward to Monday- a green day on the futures, but also, we have the defensive nature of a pharma share on our side as a safety net.
Cheers, holders.
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