I do not like the long delay in an outcome/conclusion re the price fixing investigation. Indeed there being no mention at all of progress on that score in the Trading Update makes me feel somewhat uncomfortable. If APH were absolutely clean in all respects, then APH should by now have been formally removed from the investigation, IMHO.
The Contract Manufacturing side of the business performed very well in the year ended 29 June 2019, whereas the Own Brand side of the business saw sales going down. The 'down-part' of the business is being retained whereas the 'up-part' of the business is being sold. Also two crucial directors are departing. Does that bode so well for the future that the share -price deserves to rise by nearly 25%?
What we are seeing just now is what I call Momentum Selling, i.e. small investors selling because others are selling. Once this has stopped, and I expect that to be any more now, then we may see Momentum Buying, driving the share price up to sensible levels. Current price (35p)is a joke - the fall mainly due to misunderstanding that these are the same shares as traded in Dhaka at more than twice the price than here.
Today's Trading Update points to performance in H1 being somewhat below (high) expectations, but management expects H2 to fully make up for that, with earnings for the full year to turn out in line with expectations. Forecasts for this year are EPS 13.1p against 11.4 for 2018, with dividend at 6.8p (2018 6.3p (Source Edison)). Seems to me that the today's fall in the share price is truly overdone.
Can anyone shine some light on why the share price has gone down as low as today's 36.5p (middle price)? Is there something sinister in the background I am not aware of? To my eye, the Company is an excellent modern outfit, making fine medicines, expanding sales on the world market, growing profits year to year at a nice rate. And paying useful dividends! I have increased my holding.
Despite APH's very assuring statement on the price fixing investigation, I now somehow fear there might just be something ominous for coming out of the investigation which could have an adverse affect on APH's reputation. Why should APH out-licence a niche medicine, the very thing (direct sales of niche-medicines) APH's specializes in? If nothing at all was wrong, then the investigation into APH's connection would be over and done with in a few days, not weeks or months. Sorry, if I sound negative, I am suspicious by nature, but at times it has served me well. I do hope I am wrong here.
I am not quite as negative, but indeed if last year's sales were enhanced by 'competitor supply issues' then AMS's sales will suffer more when 'competitor supply issues' are resolved. I also fear the 'America First factor' plays a negative role here. .
Today's trading statment sounds positive overall, but I am concerned that the US sales of LiquiBand have trended down, albeit for reasons explained. Could,.however, there be a danger that Trump's "America First" attitude gives competitors an 'unfair' sales-advantage, thereby impacting negatively on AMS's LiquiBand sales in the US?
At some point in time Woodford will have to sell out the entire portfolio of shares in his locked Fund to another Fund Manager Company. Then there will be no anxiety to cash in by the investors, and all the good shares in the portfolio will rise & recover very fast from the 'Woodford Effect'', which in the case of e.g. ESL has damaged the share price to the tune of 25% or more down from where they should be.