Sun Pharma

X

xxdiesel

Member
#1
#1
Well, I am bullish on the pharma sector but trying to build a long term portfolio through direct equity exposure rather than buying a Pharma Mutual fund.

I purchased 1 share of Sun Pharma today @ 486 and plan to buy in small lots over 5 years, like a SIP every month.

Any thoughts on the long term value of the script as well as the sector?
 
A

asterix24

Active Member
#2
#2
Hi Diesel,

Sun Pharma's PE is higher than the industry average (Ref: Moneycontrol), but a look at the ratios is an interesting read.

It's Debt to Equity Ratio is almost zero which is good, but it's RONW has been dipping over years and FY 2010 has been a bit disappointing as compared to preceeding years. Hence, you may want to research a bit more for your SIP :)

Happy Investing !!
 
X

xxdiesel

Member
#3
#3
@ asterix: the pe is almost 40 and is quite high indeed. But isn't it the only Fortune 500 in pharma in the BRIC region? I maybe wrong on this.
 
A

asterix24

Active Member
#4
#4
DISCLAIMER:
- I am NOT an analyst or employed by a broker
- Following is my view which may diametrically be opposite that of someone else's. Hence, please take the following recommendations with huge rock of salt and do your due diligence
- Following is my watchlist and I may hold/invest in near future in one or more of the following. All I am doing is capturing my current thought process.

--------------------------------------------------------------------------------------
Recommendations:
****************



CIPLA:
- Debt / Equity Ratio - NIL
- RONW: consistently above 20% over last 5 years which is excellent
- Dividend Payout: Consistent over past few years
- PE in line with industry expectations - Pricing is fair from this perspective
- P/Bv - 4.55 - BV growing steadily over last 4 years
- POrtfolio is wide ranging from prescription products to Off the counter (OTC) to Animal Products to Flavors and Fragnances which is pretty diversified


TORRENT PHARMA:
- Debt / Equity Ratio - 0.6
- P/BV - 5.57
- PE is 16.86 much lower compared to indsutry PE
- Dividend Yield is very consistent and pretty good
- EPS and BV have grown consistently over last 5 years
- RONNW: Average of 20+% over past few years
- Leader in Cardio Vascular and CNS threauptic areas - Markets in India and US

ORCHID CHEMICALS:
- Debt / Equity Ratio: 1.63 (high)
- P/BV - 2.07
- PE is 4.21 very very low compared to industry PE
- Dividend yield is one of the highest in the industry
- Recently completed a huge transaction - I presume it was takeover and has turned positive very quickly
- Reference: http://www.thehindu.com/business/companies/article1103096.ece

BIOCON:
- Debt/Equity Ratio: 0.12
- produces agents/intermediaries - Working on oral insulin which can be huge hit in future

Happy Investing !!
 
X

xxdiesel

Member
#6
#6
asterix24 said:
DISCLAIMER:
- I am NOT an analyst or employed by a broker
- Following is my view which may diametrically be opposite that of someone else's. Hence, please take the following recommendations with huge rock of salt and do your due diligence
- Following is my watchlist and I may hold/invest in near future in one or more of the following. All I am doing is capturing my current thought process.

--------------------------------------------------------------------------------------
Recommendations:
****************



CIPLA:
- Debt / Equity Ratio - NIL
- RONW: consistently above 20% over last 5 years which is excellent
- Dividend Payout: Consistent over past few years
- PE in line with industry expectations - Pricing is fair from this perspective
- P/Bv - 4.55 - BV growing steadily over last 4 years
- POrtfolio is wide ranging from prescription products to Off the counter (OTC) to Animal Products to Flavors and Fragnances which is pretty diversified


TORRENT PHARMA:
- Debt / Equity Ratio - 0.6
- P/BV - 5.57
- PE is 16.86 much lower compared to indsutry PE
- Dividend Yield is very consistent and pretty good
- EPS and BV have grown consistently over last 5 years
- RONNW: Average of 20+% over past few years
- Leader in Cardio Vascular and CNS threauptic areas - Markets in India and US

ORCHID CHEMICALS:
- Debt / Equity Ratio: 1.63 (high)
- P/BV - 2.07
- PE is 4.21 very very low compared to industry PE
- Dividend yield is one of the highest in the industry
- Recently completed a huge transaction - I presume it was takeover and has turned positive very quickly
- Reference: http://www.thehindu.com/business/companies/article1103096.ece

BIOCON:
- Debt/Equity Ratio: 0.12
- produces agents/intermediaries - Working on oral insulin which can be huge hit in future

Happy Investing !!
Click to expand...
OK, the first thing I noticed is that you're probably not too keen on Biocon.
 
X

xxdiesel

Member
#7
#7
Asterix: Excellent technicals and stock picks there.

I purchased Cipla today and continue to hold Sun Pharma. In fact, if Sun keeps falling; I plan to accumulate for long term.

I don't understand technicals much but your take on the stocks mentioned by you helped me research and read a lot.

I will take further exposure to Cipla. Thanks again.

What is your analysis on Ranbaxy, Dr Reddy's and Glenmark?
 
A

asterix24

Active Member
#8
#8
xxdiesel said:
OK, the first thing I noticed is that you're probably not too keen on Biocon.
Click to expand...
Well as I told you earlier, I do believe in Biocon story. However, I would like to see their performance this year and also observe on their game plan on the oral insulin to take more mature decision on this stock.

One things for sure: This will be one of the stocks that I will definitely hold for future.
 
A

asterix24

Active Member
#9
#9
Glenmark Pharma:
- P/E - 53.72 very high compared to Industry P/E 25.41
- RONW - Declined over last 2 years where as the rest of the world was progressing well
- Debt / Equity Ratio: 0.43 - Ok, but a point to consider

Dr Reddy:
- P/E - 28.03 closer to Industry P/E
- Chart shows quite a run up over last 2 years - Has gained considerably almost 4-5x
- RONW - Around the range of 10-15% - Not a fantastic number fundamentally speaking
- Debt/Equity ratio is 0.1 - Very good as there is no debt


Ranbaxy:
- P/E - 14.52 much lower than Industry P/E
- NO Dividends declared in last 2 years
- RONW - Negative in 2008, but otherwise has delivered some good numbers
- Debt/Equity Ratio - 0.85 - a bit high

Looking at all these companies without diving too much into their businesses, I would still prefer CIPLA as it's more fundamentally sound with a good RONW.

Happy Investing !!
 
X

xxdiesel

Member
#10
#10
Thanks asterix. I have started accumulating Cipla.

I am also starting a small SIP in Franklin Pharma Fund as I want to see what happens over 5 years in the sector. That way I get to hold all the names and compare that fund to my Pharma stock portfolio that I will build over the years.

However, we will continue this in the Equities thread.
 
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