Newsflash for the Snoozers - Part 15

Tuesday, 31st May 2016 10:43 - by Moosh

Beximco Pharmaceuticals (BXP) The consistently growing, profitable, cash and stock dividend issuing generic pharmaceuticals manufacturer recently announced its full year results to 31 December 2015, including some of the following highlights:

-          Net sales were up 15% compared to the previous year

-          Export sales were up 68.3% compared to the previous year

-          Earnings per share were up 27.8% compared to the previous year

-          5 new geographical markets were entered

-          46 new products (31 generics) were registered in 17 countries

-          23 products were launched in Bangladesh

There were also some post-period events included too:

-          Regulatory approval has been received from the Ministry of Health in Cambodia

-           8 new products were launched in the first quarter of 2016

-          3 new geographical markets were entered

-          42 new products (37 generics) were registered in 11 countries

With the price of BXP being 27.875p mid-price as of market close on 27 May 2016, the earnings per share of 5.06 Taka translates to 4.44p (1 Taka = 0.0087 GBP, 28 May 2016), which gives a current PE ratio of ~6.27. If fair value begins at a PE ratio of 10 then fair value begins for BXP at ~44p so the company is still very much undervalued on its latest earnings. BXP has been required to alter their financial year to July to June so the market is now waiting for this latest version in a couple of months – these results will be interesting because they should include the effect of all the new events which have occurred so far since the start of 2016, as well the effect of any exported carvedilol to the US market, which was due to begin in the first half of 2016.

The net asset value of BXP as of 31 December 2015 was 58.2 Taka (~50.6p) so whichever way you look at it, the latest price of 27.875p most definitely appears to be undervaluing the company on both earnings generation and net asset value.