It takes a while for the most loved stocks to fall. If funds other positions are very bad it is easy to prop up their best performing stock to help their overall returns.
With the developments over the weekend in the US. For those that missed it Trump held a press conference after the first death from the coronavirus and said America had beaten it and there were only 22 cases, 30 mins later it was announced that a nursing home in Washington state had 27 cases. This saw a run on many Costco's even in Palo Alto. Elsewhere, Korea;s cases are close to 4,000 and Italy went from 655 to over 1100. Now I'm sure many of you will say 'its just the flu' nothing to worry about. Well Govt's have reacted swiftly when outbreak have occured, Korea, Japan, and Italy are in lockdown. You might also be hearing reports that factories are re-opening in China - read this
https://www.globaltimes.cn/content/1181241.shtml
So,
CSL has a lab in Wuhan and China was going to be one of their growth area, the have gone to a direct distribuiton model which was going to cost the US$250-350m plus they expected increase sales of $500m. Does anyone think this will NOT have been impacted. Assuming a A$500m hit to revenue, then it is a 6-7% hit to FY20 revenue and 20-2525% hit to NPAT. Does that deserve a PE of 70?
No the jewel in the crown of the US plasma business.
CSL Plasma (formerly ZLB Plasma Services) employees don't mind being in a bloody business. CSL Plasma, a subsidiary of CSL Behring (which itself is part of CSL Limited), collects donations of blood plasma across the US through about 60 donation centers in 25 states; it also has about 10 collection locations in Germany. The company collects approximately 3 million liters of plasma each year. The plasma is used by the company's parent to manufacture therapies for bleeding disorders such as hemophilia, as well as blood clots, immune deficiencies, burns, shock, and other conditions. It also operates laboratory testing facilities and logistics centers.
The questions to ask are if the virus speads in the US like it has in Asia and Europe will the plasma collecting be effect? Will people donate blood and will they even be allowed to collect? Do they need to test current inventory to see if any carry the virus?
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