You need to have a look What happened to API?
If the PBS cut is dampening the whole industry, other players such as API should not go up a few 100 percents.
Sigma has a net cash position, and over 1200 chemists/pharmacies.
"treading water" is the worst case as the profit margin is low (and always low).
Sigma is 1 of the only 3 distributors in AUS, with increasing numbers under the banner, it can always pass the extra cost (by /delaying/cutting the delivery cost...) to the consumers, potentially, the government which has initiated the price cut.
look at the dividend (fully franked foretasted 4-5 cents for next FY) and over 400 new shops to enhance the EBIT as early as this year, it is not expensive at 70s.
Also the on-going share buy-back will reduce the outstanding shares by about 10%.
This stock has never been a screaming buy like a oversold mining stock, but the recent selling is fundamentally not justified.
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