Consider this,SIP has reported 2 years of losses, mostly from...

Consider this,

SIP has reported 2 years of losses, mostly from carrying value writedowns, to which the entire groups goodwill has been shot to pieces, to near destruction of its capacity to borrow, leaving it at near breaking point.

In its worst moments yet, it still managed to cover the majority of debt by selling its loss attributing division at a decent X P/E Ratio. Especially for a company faced with covenant breaking issues at the time.

There were plenty of hands up with expressions on the multiple buying opportunities.

This reporting season has made all adjustments and writedowns possible, with the only exception being the goodwill attributable to the Pfizer portion of sales.

With Pfizer agreements aside, and accounting for the fact that the change of trading terms and the aspen agreements somehow makeup the potential reduction in earnings from the pfizer loss, the goodwill will most likely remain the same as has been reported in this most recent report.

Now taking all this into account, this would have to mean that all the possible goodwill writedowns have been accounted for these last 2 reporting seasons, and with debt levels near historic lows, the margin on health care seems to be trading higher 6.6% up at $47mill.

with little chance of further writedowns and profit of $50mil expected to grow (see Aspen agreements), the coming reporting seasons will shine when it comes to % growth from recent reporting and there is a likelihood that natural dividends will be around 3-4 cents per share. based on EBIT of $47mill, 3 to 4 cents per share would be a likely payout.

This dividend at a 7% return values the share round mid 50's..

If you are buying today and receiving a 30% return, even if you receive nil return for 2 years your making 15%p.a. Assuming natural div's are paid next half, your return would be in the vicinity of 35%, plus a capital increase potential of 18% (say valued at 55c).

These returns are normally only seen in pure spec buys, unknowns, where your risk/reward ratio is generally leaning more to risk.

The fact that this is happening to the most recognised wholesaler/distributor and retail chains of pharmacies across the nation is unlikely to happen again.

The fact that the entire sector is not in play at the moment is the greatest reason why this opp is being presented to us.

Long term traders like Orbis will make a killing from this trade.