1. Manulife Financial (MFC)
2. TD Bank (TD)
3. Imperial Oil (IMO)
4. Shoppers Drug Mart (SC)
5. Trans Canada Pipeline (TRP)
Shoppers’ Drug Mart: during the “silent period” of Bilibala Finance, I bought back Shoppers’ Drug Mart at $35.0 because I think the regulation change in prescription drug has fully reflected in the share price.
Showing posts with label Sector-Health. Show all posts
Showing posts with label Sector-Health. Show all posts
11.16.2010
11.09.2010
Top holding in Canada 11/09/10
1. Manulife Financial (MFC)
2. TD Bank (TD)
3. Imperial Oil (IMO)
4. Shoppers Drug Mart (SC)
5. Trans Canada Pipeline (TRP)
2. TD Bank (TD)
3. Imperial Oil (IMO)
4. Shoppers Drug Mart (SC)
5. Trans Canada Pipeline (TRP)
- C$ is at par, but I don’t think it will rise further beyond $1.02, as overnight interest rate will most likely keep at 1.0% and the higher the C$ will hurt international trade between US & Canada;
- Wewill have the Shoppers Drug Mart’s 3q10 result this week;
- Manulife Financial: 3q10 result is $1.1B lower than Bilibala’s expectation, cuz it wrote off $1B goodwill in related to its USA insurance business (no way I can’t guessitmate this kind of management decision. It is non-recurring, so, who cares!!). Overall, as interest rate start rising thx to the QE 2.0, Manulife’s performance for future quarters should look better.
Manulife has 3 major shift in its business model:
1. diversify by expand its asset management business;
2. de-equity risk by increase hedge & reinsurance to 50%;
3. de-interest rate risk by higher duration of its bond holdings.
From a risk management view, I think it will provide a much smoother quarter to quarter results. However, from a business view, this is not a smart move:
1. as we all know interest rate will go up eventually, instead of go down
2. equity market will go up when it was at the bottom (in 2009)
why should anyone earn less just to smooth things out? Just follow the crowd? Anyway…..
4.08.2010
Shoppers Drug "strongly opposed" to Ontario reform
Bilibala: new rule will surely affect Shoppers Drug Mart's earning, on the other hand, as Canadian aging, the health expenses volume should continue to grow.
http://www.reuters.com/article/idUSN0712523820100407?type=marketsNews
TORONTO, April 7 (Reuters) - Shoppers Drug Mart Corp (SC.TO) said on Wednesday it is reviewing government reforms to the way prescription drugs are priced in Ontario, Canada's most populous province, and how the changes will affect the company's bottom line.
Shoppers, Canada's biggest pharmacy chain, said it is taking a fresh look at its strategic priorities and initiatives, and is reviewing its forecasts for prescription sales growth in fiscal 2010.
The Ontario government, looking to keep health care costs in check, said on Wednesday it will impose lower generic prescription drug prices under the Ontario Drug Benefit Program.
Shoppers Drug Mart said it is "strongly opposed" to the changes, adding it believes they will have a negative impact on pharmacy services and patient care in the province, "as it is inevitable that pharmacies will have to make reductions to their current service offerings".
The company said the reforms would require all pharmacies, including the more than 600 Shoppers Drug Mart pharmacies in Ontario, to review their operating, investing and professional practice models to ensure long-term sustainability.
Shoppers said it will report its quarterly results on April 28 and it expects to provide more information on its review at that time.
"These announced changes reinforce our view that in the long term, the successful players in retail pharmacy will be those with size, scale and an ability to leverage operating efficiencies," said Jurgen Schreiber, president and chief executive of Shoppers Drug Mart.
"Shoppers Drug Mart, with the largest integrated pharmacy network in the country and the leading market share, will be challenged in the short term to adjust to the changes announced today, but remains well positioned for the long term," he said. (Reporting by John McCrank; editing by Peter Galloway)
http://www.reuters.com/article/idUSN0712523820100407?type=marketsNews
TORONTO, April 7 (Reuters) - Shoppers Drug Mart Corp (SC.TO) said on Wednesday it is reviewing government reforms to the way prescription drugs are priced in Ontario, Canada's most populous province, and how the changes will affect the company's bottom line.
Shoppers, Canada's biggest pharmacy chain, said it is taking a fresh look at its strategic priorities and initiatives, and is reviewing its forecasts for prescription sales growth in fiscal 2010.
The Ontario government, looking to keep health care costs in check, said on Wednesday it will impose lower generic prescription drug prices under the Ontario Drug Benefit Program.
Shoppers Drug Mart said it is "strongly opposed" to the changes, adding it believes they will have a negative impact on pharmacy services and patient care in the province, "as it is inevitable that pharmacies will have to make reductions to their current service offerings".
The company said the reforms would require all pharmacies, including the more than 600 Shoppers Drug Mart pharmacies in Ontario, to review their operating, investing and professional practice models to ensure long-term sustainability.
Shoppers said it will report its quarterly results on April 28 and it expects to provide more information on its review at that time.
"These announced changes reinforce our view that in the long term, the successful players in retail pharmacy will be those with size, scale and an ability to leverage operating efficiencies," said Jurgen Schreiber, president and chief executive of Shoppers Drug Mart.
"Shoppers Drug Mart, with the largest integrated pharmacy network in the country and the leading market share, will be challenged in the short term to adjust to the changes announced today, but remains well positioned for the long term," he said. (Reporting by John McCrank; editing by Peter Galloway)
2.24.2010
Shoppers Drug Mart slowly turning into the urban Walmart
Bilibala: expanding may rise sales but reduce profit margin. Also, it may rise debt, let's see how it goes.
http://www.torontolife.com/daily/style/shop-talk/2010/02/24/shoppers-drug-mart-slowly-turning-into-the-urban-walmart/
Shoppers Drug Mart, the ubiquitous drugstore that sells everything from frozen vegetables to cosmetics (oh, medicine, too), is further expanding its offerings to include electronics and ethnic foods in its continuing evolution into a one-stop shopping destination.
Following in the footsteps of Walmart and Canadian Tire, Shoppers CEO Jurgen Schreiber told the Globe that he’d like his company to focus more on food and introduce more private-label lines. Photo departments will be phased out to make room for high-tech gadgets and a “youth corner” to attract younger shoppers.
It seems nothing is stopping the 59-year-old company that’s been dubbed the city’s general store (see our article about Shoppers in the March issue of Toronto Life). As we noted in that piece, there are currently 9.5 million Optimum cardholders across the country. The store’s strong fourth-quarter results, which were released two weeks ago, set a record for the company, boosted by sales of over-the-counter medication (thank you, H1N1).
Just as people go to Indigo to buy coffee and Staples to buy potato chips, perhaps they’ll soon go to Shoppers to buy Life brand bacon.
http://www.torontolife.com/daily/style/shop-talk/2010/02/24/shoppers-drug-mart-slowly-turning-into-the-urban-walmart/
Shoppers Drug Mart, the ubiquitous drugstore that sells everything from frozen vegetables to cosmetics (oh, medicine, too), is further expanding its offerings to include electronics and ethnic foods in its continuing evolution into a one-stop shopping destination.
Following in the footsteps of Walmart and Canadian Tire, Shoppers CEO Jurgen Schreiber told the Globe that he’d like his company to focus more on food and introduce more private-label lines. Photo departments will be phased out to make room for high-tech gadgets and a “youth corner” to attract younger shoppers.
It seems nothing is stopping the 59-year-old company that’s been dubbed the city’s general store (see our article about Shoppers in the March issue of Toronto Life). As we noted in that piece, there are currently 9.5 million Optimum cardholders across the country. The store’s strong fourth-quarter results, which were released two weeks ago, set a record for the company, boosted by sales of over-the-counter medication (thank you, H1N1).
Just as people go to Indigo to buy coffee and Staples to buy potato chips, perhaps they’ll soon go to Shoppers to buy Life brand bacon.
2.22.2010
Shoppers Drug Mart open new general store
Bilibala: to me, products in Shoppers Drug Mart is very expensive, but, irrationally, customers enjoy shopping at Shoppers Drug Mart. As her shareholders, this is a strong economic moat that I need to take into account in her stock price. CA$44 is really attractive to BUY.
http://www.torontolife.com/features/new-general-store/
Shoppers outposts are suddenly everywhere, fulfilling our late-night need for milk, organic chocolate and self-bronzer. The evolution of the corner drugstore to consumer playground By Maryam Sanati
Just five minutes into Seniors’ Day at my local Shoppers Drug Mart, I’ve loaded up on Pampers, a container of organic flax meal, an electric toothbrush, Life brand vitamins and Advil. I am not a senior. I am at least three decades away from retirement. But here I am, on the last Thursday of the month, snaking my shopping cart around walkers and bundle buggies, hunting for what I need. My mother has split off into another tributary in the store. Divide and conquer. In a sense, I have invited myself to the monthly meeting of her club, where members get 20 per cent off, and I am behaving somewhat overzealously.
There’s no rule against shopping with a senior on Seniors’ Day and taking advantage of their discount. It’s doubtful that the company cares about the finer details of borrowed seniorship. The store is full.
“They give you a $10 off coupon if you spend $50,” my mom says to me as we line up for a cashier, every till buzzing. It is in this line that I realize how devoted Shoppers Drug Mart customers are. Loyalty is rare in this depressed retail environment—a time when, save for special mom-and-pop survivors, a cherished butcher or cheese vendor or a barbershop, most of us have collectively turned away from the small and into the viable expanse of the big.
The chain has not escaped criticism for its aspirations. In late 2007, negative reaction burbled up when construction of a super-sized Shoppers started on the Danforth, pushing out the Ralph Day Funeral Home and a few other small businesses. Inevitably, though, the issue was forgotten. Now residents of Greektown are in that very store late at night, filling their prescriptions and buying their Toblerones. That’s what happens when a big box goes urban; convenience converts even skeptics. They find themselves drawn to the possibility of buying their vitamins and their hair elastics and even some of their electronic gadgets (certain Shoppers now even sell Wiis) in one amenable shopping environment, while also tending to the health of their families.
We go there mostly for necessity: toilet paper, cold remedies, prescriptions (which constitute some 50 per cent of the company’s sales), kitty litter. The proposition that then engages us is the huge amount of choice we see and the other things that we feel suit our lives in a way that is not entirely, convincingly, necessary but is certainly somehow justifiable.
And there is another hook. I can cash in my thousands of Optimum points, accumulated steadily through 10- or 20-times-the-points promotions, only to rack up more Optimum points to bring me back for more shopping tomorrow or the day after. This is every retailer’s reverie: the loyal spend while earning loyalty points to enable them to spend again—the sweet circle of shopping life.
Like newspaper boxes, parking meters and Starbucks, if something is ubiquitous, it becomes part of the background of a city, almost invisible to the people who pass by it every day. We become unmoved to consider how the thing that is everywhere came to be, and just how much of the city’s real estate it consumes. And that’s why I was surprised to discover how many Shoppers Drug Marts there are. Across this city, 127 have planted their patriotic red and white flag posts—the corporate colours, accented by sky blue. (More than 1,170 exist in Canada, operating as Pharmaprix in Quebec.) There are also 65 Shoppers Home Health Care stores, which sell canes, walkers, wheelchairs, braces and more.
The Optimum card, launched 10 years ago, is the more agile competitor to Air Miles, a card that is aligned with Rexall Pharma Plus. By comparison, Optimum points accrue more quickly, and they’re appealingly easy to use—each receipt tells you how many you’ve got. All you have to do is carry the card in your wallet. Approximately 2.5 million of us, or nearly half the GTA population, are Optimum cardholders. Nationwide, 9.5 million are active card users of Optimum.
Eighty per cent of cardholders are women. The privacy statement for the card notes, “We do not rent, sell or provide the personal information of Shoppers Optimum members.” But every swipe builds a sense of how 9.5 million people shop around the country, and the company tracks the changes they exhibit in their spending habits, the average amount of money spent per visit, and how new products are being received by whom.
Targeted mailings are sent out based on Optimum data: for instance, Shoppers knows I buy Pampers, Camilia and Children’s Tylenol, and so my local store mailed an invitation to my home address to join the VIB (Very Important Baby) program, which promises it will give “you, and everyone who cares for your little one, more rewards and exclusive offers.”
Shoppers is determined to extend its reach. It’s increasing its number of private labels from 11 to 20; launching more of its gleaming Murale cosmetics boutiques (Shoppers’ answer to Sephora), one of which opened at the Shops at Don Mills last summer; and, most significantly, introducing large-format stores, still called “prototypes,” with huge selection and twice the square footage of old-format Shoppers. The majority of Shoppers Drug Marts built since 2002 are the giant prototype stores, averaging 14,000 square feet. They’re taking over the city and slowly redefining how we shop.
Faith Popcorn famously noted that, “Shopping is the museum of the 21st century.” When you’re in the Avenue and Lawrence Shoppers, you know what she’s talking about. It is a model of the new prototype store, and it’s more futuristic and splendid than any drugstore I have ever seen. The aisles are wide, the sightlines are good, and the windows are practically floor-to-ceiling. Open 24 hours, the store is staffed by 90 employees. (The staff complement was doubled when the store expanded in 2008 from a smaller location up the road.)
I took a tour of the facility recently with John Caplice, an affable 40-something father of three who is a senior VP at Shoppers. We start in the BeautyBoutique as he explains the concept behind Shoppers’ cosmetic sales: don’t keep anything, even the high-end stuff, under glass.
The so-called “open sell” strategy is winning business away from weakened department stores. Nearby are two beauty consultants if you need them. “We give customers the choice of service or self-service,” Caplice says, repeating the word “convenience,” which, in a company that professes to be the most convenient retailer in Canada, is an ingrained mantra.
In the cosmetics area, the advisers have no particular affiliation, a philosophical split from the cosmetics floor in any department store, where Lancôme competes with Shiseido and so on. The staff working here are trained to compare and contrast the benefits of each brand. By the end of 2010, there will be 230 Shoppers stores in Canada with this beauty format.
The Avenue and Lawrence store also includes a super-deluxe baby section with a built-in fridge stocking organic baby food. At the back, the dispensary looks nothing like the small-windowed pharmacies of yore. Clerks are stationed around an open curved counter, and next to the prescription drop-off area is a comfortable waiting lounge and a private room for sensitive pharmacist-patient consultations.
In the Food Essentials section, which since 2002 has been established in close to 600 stores, you can find good mozzarella, designer salads and organic products from Nativa, the private label Shoppers launched in March 2008 with 170 items in orange packaging. There are now 200 Nativa goods; I’m partial to the gingersnaps.
Caplice takes me to the toothpaste aisle. Years ago, a dental care section was four feet long. At the Avenue and Lawrence store, there are 28 feet of dental hygiene products, lip balm, floss and other attendant consumer goods. I feel like I’m inspecting a Queen’s regiment made up of toothbrushes.
This is precisely why there are large-format stores in the first place. Caplice explains that the retail space had to expand to accommodate an ever-increasing assortment of stuff—Shoppers’ own products and innovations from the leading consumer companies.
http://www.torontolife.com/features/new-general-store/
Shoppers outposts are suddenly everywhere, fulfilling our late-night need for milk, organic chocolate and self-bronzer. The evolution of the corner drugstore to consumer playground By Maryam Sanati
Just five minutes into Seniors’ Day at my local Shoppers Drug Mart, I’ve loaded up on Pampers, a container of organic flax meal, an electric toothbrush, Life brand vitamins and Advil. I am not a senior. I am at least three decades away from retirement. But here I am, on the last Thursday of the month, snaking my shopping cart around walkers and bundle buggies, hunting for what I need. My mother has split off into another tributary in the store. Divide and conquer. In a sense, I have invited myself to the monthly meeting of her club, where members get 20 per cent off, and I am behaving somewhat overzealously.
There’s no rule against shopping with a senior on Seniors’ Day and taking advantage of their discount. It’s doubtful that the company cares about the finer details of borrowed seniorship. The store is full.
“They give you a $10 off coupon if you spend $50,” my mom says to me as we line up for a cashier, every till buzzing. It is in this line that I realize how devoted Shoppers Drug Mart customers are. Loyalty is rare in this depressed retail environment—a time when, save for special mom-and-pop survivors, a cherished butcher or cheese vendor or a barbershop, most of us have collectively turned away from the small and into the viable expanse of the big.
The chain has not escaped criticism for its aspirations. In late 2007, negative reaction burbled up when construction of a super-sized Shoppers started on the Danforth, pushing out the Ralph Day Funeral Home and a few other small businesses. Inevitably, though, the issue was forgotten. Now residents of Greektown are in that very store late at night, filling their prescriptions and buying their Toblerones. That’s what happens when a big box goes urban; convenience converts even skeptics. They find themselves drawn to the possibility of buying their vitamins and their hair elastics and even some of their electronic gadgets (certain Shoppers now even sell Wiis) in one amenable shopping environment, while also tending to the health of their families.
We go there mostly for necessity: toilet paper, cold remedies, prescriptions (which constitute some 50 per cent of the company’s sales), kitty litter. The proposition that then engages us is the huge amount of choice we see and the other things that we feel suit our lives in a way that is not entirely, convincingly, necessary but is certainly somehow justifiable.
And there is another hook. I can cash in my thousands of Optimum points, accumulated steadily through 10- or 20-times-the-points promotions, only to rack up more Optimum points to bring me back for more shopping tomorrow or the day after. This is every retailer’s reverie: the loyal spend while earning loyalty points to enable them to spend again—the sweet circle of shopping life.
Like newspaper boxes, parking meters and Starbucks, if something is ubiquitous, it becomes part of the background of a city, almost invisible to the people who pass by it every day. We become unmoved to consider how the thing that is everywhere came to be, and just how much of the city’s real estate it consumes. And that’s why I was surprised to discover how many Shoppers Drug Marts there are. Across this city, 127 have planted their patriotic red and white flag posts—the corporate colours, accented by sky blue. (More than 1,170 exist in Canada, operating as Pharmaprix in Quebec.) There are also 65 Shoppers Home Health Care stores, which sell canes, walkers, wheelchairs, braces and more.
The Optimum card, launched 10 years ago, is the more agile competitor to Air Miles, a card that is aligned with Rexall Pharma Plus. By comparison, Optimum points accrue more quickly, and they’re appealingly easy to use—each receipt tells you how many you’ve got. All you have to do is carry the card in your wallet. Approximately 2.5 million of us, or nearly half the GTA population, are Optimum cardholders. Nationwide, 9.5 million are active card users of Optimum.
Eighty per cent of cardholders are women. The privacy statement for the card notes, “We do not rent, sell or provide the personal information of Shoppers Optimum members.” But every swipe builds a sense of how 9.5 million people shop around the country, and the company tracks the changes they exhibit in their spending habits, the average amount of money spent per visit, and how new products are being received by whom.
Targeted mailings are sent out based on Optimum data: for instance, Shoppers knows I buy Pampers, Camilia and Children’s Tylenol, and so my local store mailed an invitation to my home address to join the VIB (Very Important Baby) program, which promises it will give “you, and everyone who cares for your little one, more rewards and exclusive offers.”
Shoppers is determined to extend its reach. It’s increasing its number of private labels from 11 to 20; launching more of its gleaming Murale cosmetics boutiques (Shoppers’ answer to Sephora), one of which opened at the Shops at Don Mills last summer; and, most significantly, introducing large-format stores, still called “prototypes,” with huge selection and twice the square footage of old-format Shoppers. The majority of Shoppers Drug Marts built since 2002 are the giant prototype stores, averaging 14,000 square feet. They’re taking over the city and slowly redefining how we shop.
Faith Popcorn famously noted that, “Shopping is the museum of the 21st century.” When you’re in the Avenue and Lawrence Shoppers, you know what she’s talking about. It is a model of the new prototype store, and it’s more futuristic and splendid than any drugstore I have ever seen. The aisles are wide, the sightlines are good, and the windows are practically floor-to-ceiling. Open 24 hours, the store is staffed by 90 employees. (The staff complement was doubled when the store expanded in 2008 from a smaller location up the road.)
I took a tour of the facility recently with John Caplice, an affable 40-something father of three who is a senior VP at Shoppers. We start in the BeautyBoutique as he explains the concept behind Shoppers’ cosmetic sales: don’t keep anything, even the high-end stuff, under glass.
The so-called “open sell” strategy is winning business away from weakened department stores. Nearby are two beauty consultants if you need them. “We give customers the choice of service or self-service,” Caplice says, repeating the word “convenience,” which, in a company that professes to be the most convenient retailer in Canada, is an ingrained mantra.
In the cosmetics area, the advisers have no particular affiliation, a philosophical split from the cosmetics floor in any department store, where Lancôme competes with Shiseido and so on. The staff working here are trained to compare and contrast the benefits of each brand. By the end of 2010, there will be 230 Shoppers stores in Canada with this beauty format.
The Avenue and Lawrence store also includes a super-deluxe baby section with a built-in fridge stocking organic baby food. At the back, the dispensary looks nothing like the small-windowed pharmacies of yore. Clerks are stationed around an open curved counter, and next to the prescription drop-off area is a comfortable waiting lounge and a private room for sensitive pharmacist-patient consultations.
In the Food Essentials section, which since 2002 has been established in close to 600 stores, you can find good mozzarella, designer salads and organic products from Nativa, the private label Shoppers launched in March 2008 with 170 items in orange packaging. There are now 200 Nativa goods; I’m partial to the gingersnaps.
Caplice takes me to the toothpaste aisle. Years ago, a dental care section was four feet long. At the Avenue and Lawrence store, there are 28 feet of dental hygiene products, lip balm, floss and other attendant consumer goods. I feel like I’m inspecting a Queen’s regiment made up of toothbrushes.
This is precisely why there are large-format stores in the first place. Caplice explains that the retail space had to expand to accommodate an ever-increasing assortment of stuff—Shoppers’ own products and innovations from the leading consumer companies.
11.26.2009
FDA grants full approval to J&J's HIV drug
http://www.forbes.com/feeds/ap/2009/11/25/business-health-care-us-j-amp-j-hiv-drug_7159873.html
Associated Press, 11.25.09, 04:03 PM EST
BRIDGEWATER, N.J. --
A division of Johnson & Johnson said Wednesday that federal regulators granted full approval to an HIV drug designed to treat patients who have stopped responding to other treatments.
=> It is good if one can develop an HIV drug
The Food and Drug Administration gave Intelence preliminary approval in January 2008 under its accelerated approval program, which allowed J&J to market the drug. In order to gain full approval, FDA required the company to submit follow-up data on the drug's effectiveness.
More recent data submitted by J&J's Tibotec unit showed that 60 percent of patients taking the drug for 48 weeks had undetectable levels of HIV in their blood compared with 38 percent of patients taking a placebo.
Intelence is a non-nucleoside reverse transcriptase inhibitor, or NNRTI, that blocks the enzyme HIV needs to multiply. The twice-daily tablet is already approved for use in 50 countries around the world.
Tibotec Therapeutics is a division of Ortho Biotech Products LP, a Johnson & Johnson company based in Bridgewater, N.J.
Shares of Johnson & Johnson rose 15 cents to $63.34.
Associated Press, 11.25.09, 04:03 PM EST
BRIDGEWATER, N.J. --
A division of Johnson & Johnson said Wednesday that federal regulators granted full approval to an HIV drug designed to treat patients who have stopped responding to other treatments.
=> It is good if one can develop an HIV drug
The Food and Drug Administration gave Intelence preliminary approval in January 2008 under its accelerated approval program, which allowed J&J to market the drug. In order to gain full approval, FDA required the company to submit follow-up data on the drug's effectiveness.
More recent data submitted by J&J's Tibotec unit showed that 60 percent of patients taking the drug for 48 weeks had undetectable levels of HIV in their blood compared with 38 percent of patients taking a placebo.
Intelence is a non-nucleoside reverse transcriptase inhibitor, or NNRTI, that blocks the enzyme HIV needs to multiply. The twice-daily tablet is already approved for use in 50 countries around the world.
Tibotec Therapeutics is a division of Ortho Biotech Products LP, a Johnson & Johnson company based in Bridgewater, N.J.
Shares of Johnson & Johnson rose 15 cents to $63.34.
11.11.2009
Shoppers Drug Mart 3q09 press release
November 11, 2009 – Toronto, Ontario – Shoppers Drug Mart Corporation (TSX: SC) today announced its financial results for the third quarter ended October 10, 2009.
Third Quarter Results (16 Weeks)
Third quarter sales increased 7.9% to $3.013 billion, with the Company continuing to experience strong sales growth in all regions of the country. The Company’s capital investment program, which has resulted in an 11.6% increase in drug store selling space compared to a year ago, continues to have a positive impact on sales growth. Effective marketing campaigns, combined with differentiated and impactful promotions utilizing the Shoppers Optimum loyalty card program, also contributed to top-line growth. On a same-store basis and excluding tobacco products, sales increased 4.8% during the quarter.
Prescription sales increased 9.7% in the third quarter to $1.481 billion, accounting for 49.1% of the Company’s sales mix compared to 48.3% in the same period last year. On a same-store basis, prescription sales increased 5.8%, driven by strong growth in the number of prescriptions filled, while increased generic utilization continued to have a deflationary impact on sales growth in the category. In the third quarter of 2009, generic molecules represented 52.8% of prescriptions dispensed compared to 51.5% of prescriptions dispensed in the third quarter of 2008.
Front store sales increased 6.2% in the third quarter to $1.532 billion, with the Company continuing to experience sales gains in all categories except tobacco. On a same-store basis and excluding tobacco products, front store sales increased 3.9%.
Third quarter net earnings increased 6.6% to $171 million or 79 cents per share (diluted) from $160 million or 74 cents per share (diluted) a year ago. This increase was driven by strong sales growth, improved purchasing synergies and a continued emphasis on cost reduction, productivity and efficiency, the benefits of which were partially offset by increased amortization and higher expenses at store-level associated with the continued expansion of the store network, along with stepped-up investments in pricing and promotional activities.
Commenting on the results, Jürgen Schreiber, President and CEO stated, “We are pleased with our third quarter results and our performance thus far in 2009, as we continue to deliver growth in these challenging economic times. The strength of our pharmacy programs and services, combined with effective front store merchandising and marketing initiatives, have us well-positioned heading into the holiday season and the final weeks of 2009.”
Year-to-date Results (40 weeks)
Sales for the first three quarters of 2009 increased 8.2% to $7.497 billion, with prescription sales up 10.3% and front store sales up 6.3%. On a same-store basis and excluding tobacco products, sales increased 4.8%, with prescription sales up 5.8% and front store sales up 4.0%. During the first three quarters of 2009, prescription sales accounted for 49.0% of the Company’s sales mix compared to 48.1% in the same period last year.
Net earnings for the first three quarters of 2009 increased 6.8% to $414 million or $1.90 per share (diluted) from $388 million or $1.78 per share (diluted) a year ago.
Store Network Development
During the third quarter, 37 drug stores were opened or acquired, 15 of which were relocations, and one smaller drug store was closed. The Company also added two Murale luxury beauty stores to its network during the quarter. At quarter-end, there were 1,282 stores in the system, comprised of 1,212 drug stores (1,170 Shoppers Drug Mart/Pharmaprix stores and 42 Shoppers Simply Pharmacy/Pharmaprix Simplement Santé stores), 66 Shoppers Home Health Care stores and four Murale stores. Drug store selling space was approximately 11.6 million square feet at the end of the third quarter, an increase of 11.6% compared to a year ago.
Dividend
The Company also announced today that its Board of Directors has declared a dividend of 21.5 cents per common share, payable January 15, 2010 to shareholders of record as of the close of business on December 31, 2009.
Third Quarter Results (16 Weeks)
Third quarter sales increased 7.9% to $3.013 billion, with the Company continuing to experience strong sales growth in all regions of the country. The Company’s capital investment program, which has resulted in an 11.6% increase in drug store selling space compared to a year ago, continues to have a positive impact on sales growth. Effective marketing campaigns, combined with differentiated and impactful promotions utilizing the Shoppers Optimum loyalty card program, also contributed to top-line growth. On a same-store basis and excluding tobacco products, sales increased 4.8% during the quarter.
Prescription sales increased 9.7% in the third quarter to $1.481 billion, accounting for 49.1% of the Company’s sales mix compared to 48.3% in the same period last year. On a same-store basis, prescription sales increased 5.8%, driven by strong growth in the number of prescriptions filled, while increased generic utilization continued to have a deflationary impact on sales growth in the category. In the third quarter of 2009, generic molecules represented 52.8% of prescriptions dispensed compared to 51.5% of prescriptions dispensed in the third quarter of 2008.
Front store sales increased 6.2% in the third quarter to $1.532 billion, with the Company continuing to experience sales gains in all categories except tobacco. On a same-store basis and excluding tobacco products, front store sales increased 3.9%.
Third quarter net earnings increased 6.6% to $171 million or 79 cents per share (diluted) from $160 million or 74 cents per share (diluted) a year ago. This increase was driven by strong sales growth, improved purchasing synergies and a continued emphasis on cost reduction, productivity and efficiency, the benefits of which were partially offset by increased amortization and higher expenses at store-level associated with the continued expansion of the store network, along with stepped-up investments in pricing and promotional activities.
Commenting on the results, Jürgen Schreiber, President and CEO stated, “We are pleased with our third quarter results and our performance thus far in 2009, as we continue to deliver growth in these challenging economic times. The strength of our pharmacy programs and services, combined with effective front store merchandising and marketing initiatives, have us well-positioned heading into the holiday season and the final weeks of 2009.”
Year-to-date Results (40 weeks)
Sales for the first three quarters of 2009 increased 8.2% to $7.497 billion, with prescription sales up 10.3% and front store sales up 6.3%. On a same-store basis and excluding tobacco products, sales increased 4.8%, with prescription sales up 5.8% and front store sales up 4.0%. During the first three quarters of 2009, prescription sales accounted for 49.0% of the Company’s sales mix compared to 48.1% in the same period last year.
Net earnings for the first three quarters of 2009 increased 6.8% to $414 million or $1.90 per share (diluted) from $388 million or $1.78 per share (diluted) a year ago.
Store Network Development
During the third quarter, 37 drug stores were opened or acquired, 15 of which were relocations, and one smaller drug store was closed. The Company also added two Murale luxury beauty stores to its network during the quarter. At quarter-end, there were 1,282 stores in the system, comprised of 1,212 drug stores (1,170 Shoppers Drug Mart/Pharmaprix stores and 42 Shoppers Simply Pharmacy/Pharmaprix Simplement Santé stores), 66 Shoppers Home Health Care stores and four Murale stores. Drug store selling space was approximately 11.6 million square feet at the end of the third quarter, an increase of 11.6% compared to a year ago.
Dividend
The Company also announced today that its Board of Directors has declared a dividend of 21.5 cents per common share, payable January 15, 2010 to shareholders of record as of the close of business on December 31, 2009.
9.22.2009
Shoppers Drug Mart says to boost store size
=> Health is in needed, that is the driving force on Shoppers Drug Mart's expansion
TORONTO, Sept 22 (Reuters) - Shoppers Drug Mart (SC.TO), Canada's biggest pharmacy chain, intends to take advantage of weak conditions in the commercial real estate market to expand existing stores or move them to bigger premises, its chief executive said on Tuesday.
Jurgen Schreiber, the company's president and CEO, told a retail conference in Toronto that Shoppers is expanding or relocating 61 stores this year, with another 71 stores targeted for 2010.
The company says that by yearend, only 624 of its more than 1,260 existing stores will be less than 10,000 square feet. Shoppers says its target is between 13,500 and 14,500 square feet of selling space.
Schreiber said the company will also open new stores across the country in the next few years with significant focus on Western Canada and Quebec, noting that those two regions are "completely under-penetrated with our brand".
He said the company must also continue to concentrate on development in Canada's top 10 urban areas if it is to get the return it wants. In its key Ontario market, Shoppers has a rule of operating a store for every 15,000 people.
In the quarter to the end of July, Shoppers opened or bought 27 drugstores, eight of which were relocations. At that time, the company had 1,259 stores, including 1,159 drugstores and 66 Shoppers Home Health Care stores, which supply medical equipment and devices, and two Murale stores, a stand-alone luxury beauty brand it opened last year.
Shoppers shares, which have fallen 21 percent in the past year, were up 0.6 percent at C$43.22 on the Toronto Stock Exchange on Tuesday afternoon.
($1=$1.07 Canadian) (Reporting by Scott Anderson; editing by Peter Galloway)
TORONTO, Sept 22 (Reuters) - Shoppers Drug Mart (SC.TO), Canada's biggest pharmacy chain, intends to take advantage of weak conditions in the commercial real estate market to expand existing stores or move them to bigger premises, its chief executive said on Tuesday.
Jurgen Schreiber, the company's president and CEO, told a retail conference in Toronto that Shoppers is expanding or relocating 61 stores this year, with another 71 stores targeted for 2010.
The company says that by yearend, only 624 of its more than 1,260 existing stores will be less than 10,000 square feet. Shoppers says its target is between 13,500 and 14,500 square feet of selling space.
Schreiber said the company will also open new stores across the country in the next few years with significant focus on Western Canada and Quebec, noting that those two regions are "completely under-penetrated with our brand".
He said the company must also continue to concentrate on development in Canada's top 10 urban areas if it is to get the return it wants. In its key Ontario market, Shoppers has a rule of operating a store for every 15,000 people.
In the quarter to the end of July, Shoppers opened or bought 27 drugstores, eight of which were relocations. At that time, the company had 1,259 stores, including 1,159 drugstores and 66 Shoppers Home Health Care stores, which supply medical equipment and devices, and two Murale stores, a stand-alone luxury beauty brand it opened last year.
Shoppers shares, which have fallen 21 percent in the past year, were up 0.6 percent at C$43.22 on the Toronto Stock Exchange on Tuesday afternoon.
($1=$1.07 Canadian) (Reporting by Scott Anderson; editing by Peter Galloway)
9.01.2009
Shoppers Drug Mart Corporation to open first Murale store in Toronto
New beauty destination offers access to global beauty brands and an elevated level of beauty expertise
TORONTO, Sept. 1 /CNW/ - Shoppers Drug Mart Corporation (TSX:SC) willpremiere its innovative and exciting new retail beauty store, Murale, inToronto Friday, September 4th in the Shops at Don Mills at 1090 Don MillsRoad. The beauty store, the third of its kind to open in Canada, will featurean unprecedented assortment of luxury, dermatological, fragrance and nichebrands from around the world.
"We've brought the best in beauty brands and expertise together in thisfantastic new beauty destination," said Jurgen Schreiber, President and CEO ofShoppers Drug Mart. "Murale is unlike any other beauty offering in NorthAmerica with its unique combination of leading beauty and dermatologicalproducts and professional, expert services and consultation."
Upon entering the store, customers will be delighted by the assortment ofleading global luxury prestige cosmetics brands including Bobbi Brown, Chanel,Estée Lauder, Lancôme and Nars, among others, each with their own area forinteractivity and application. The store's fragrance section includes over 75men's and women's scents from fragrance houses and designers like Prada, DonnaKaran, Chloé, Cartier and Etat Libre d'Orange. Offering personalized andunbiased beauty advice, Murale Beauty Masters will assist customers in findingcosmetics and fragrances suited to their needs and also provide expert makeupapplications.
Murale's sophisticated dermatological area is equipped with professionalassessment tools and the latest in topical treatments and nutra-cosmetics.
With an assortment that delivers excellence in skin care, Murale will featuretrusted and innovative brands like Natura Bissé, Vichy, Murad, and Darphin.
Focused on personalized consultation, Murale's professional skin care teamincludes a full-time Aesthetician and Pharmacist.
In addition to leading products, expert consultation and advice, Muralewill also offer unique services including a Benefit Brow Bar and a menu ofover 30 professional beauty and spa services available in the private cabineadjacent to the dermatological area.
"Murale is a truly unique experience that promises to delight, surpriseand inspire everyone to find their own beautiful," says Shelley Rozenwald,President, Murale. "We've travelled the globe to create the finest assortmentand we're thrilled to bring these beauty discoveries and treasures toCanadians. Since our first Murale store opened in Ottawa, we've receivedfantastic feedback from our customers who are enchanted by our service, ourbrands and our expertise. Now we can provide Torontonians with the opportunityto experience this unique beauty destination."
Elegant and contemporary, Murale's design is inviting and allowscustomers the opportunity to touch, feel and discover the extensive range ofbeauty products, as well as interact with the store's experts. The firstMurale store opened in Place d'Orléans in Ottawa this past November while theCompany's first flagship opened in Montreal in December 2008. The Companyplans to open up to five additional locations in Canada this year includingstores in Calgary and Vancouver.
More information on Murale, and the brandsand services within, can be found at www.murale.ca. On September 3, 2009, from 9:00 a.m. to 11:00 a.m., media will have theopportunity to preview the new Toronto store. To RSVP, please contact AnneCowans at 416.919.1221, acowans@overcatcommunications.com or Cecille de laCruz at 416.966.9970 ext. 228, cdelacruz@overcatcommunications.com.
Bilibala comments:
It should help Shoppers Drug Mart to further improve its profit margin.
On the other hand, whenever there's expansion plan, a corp usually need to rise debt. To me, Shoppers' debt is quite high and it will increase the credit risk of the company. In today's economy environment, where you can borrow cheaply is fine, but need to keep an eyes on this new store and see how long it will take it to break even and pay back.
TORONTO, Sept. 1 /CNW/ - Shoppers Drug Mart Corporation (TSX:SC) willpremiere its innovative and exciting new retail beauty store, Murale, inToronto Friday, September 4th in the Shops at Don Mills at 1090 Don MillsRoad. The beauty store, the third of its kind to open in Canada, will featurean unprecedented assortment of luxury, dermatological, fragrance and nichebrands from around the world.
"We've brought the best in beauty brands and expertise together in thisfantastic new beauty destination," said Jurgen Schreiber, President and CEO ofShoppers Drug Mart. "Murale is unlike any other beauty offering in NorthAmerica with its unique combination of leading beauty and dermatologicalproducts and professional, expert services and consultation."
Upon entering the store, customers will be delighted by the assortment ofleading global luxury prestige cosmetics brands including Bobbi Brown, Chanel,Estée Lauder, Lancôme and Nars, among others, each with their own area forinteractivity and application. The store's fragrance section includes over 75men's and women's scents from fragrance houses and designers like Prada, DonnaKaran, Chloé, Cartier and Etat Libre d'Orange. Offering personalized andunbiased beauty advice, Murale Beauty Masters will assist customers in findingcosmetics and fragrances suited to their needs and also provide expert makeupapplications.
Murale's sophisticated dermatological area is equipped with professionalassessment tools and the latest in topical treatments and nutra-cosmetics.
With an assortment that delivers excellence in skin care, Murale will featuretrusted and innovative brands like Natura Bissé, Vichy, Murad, and Darphin.
Focused on personalized consultation, Murale's professional skin care teamincludes a full-time Aesthetician and Pharmacist.
In addition to leading products, expert consultation and advice, Muralewill also offer unique services including a Benefit Brow Bar and a menu ofover 30 professional beauty and spa services available in the private cabineadjacent to the dermatological area.
"Murale is a truly unique experience that promises to delight, surpriseand inspire everyone to find their own beautiful," says Shelley Rozenwald,President, Murale. "We've travelled the globe to create the finest assortmentand we're thrilled to bring these beauty discoveries and treasures toCanadians. Since our first Murale store opened in Ottawa, we've receivedfantastic feedback from our customers who are enchanted by our service, ourbrands and our expertise. Now we can provide Torontonians with the opportunityto experience this unique beauty destination."
Elegant and contemporary, Murale's design is inviting and allowscustomers the opportunity to touch, feel and discover the extensive range ofbeauty products, as well as interact with the store's experts. The firstMurale store opened in Place d'Orléans in Ottawa this past November while theCompany's first flagship opened in Montreal in December 2008. The Companyplans to open up to five additional locations in Canada this year includingstores in Calgary and Vancouver.
More information on Murale, and the brandsand services within, can be found at www.murale.ca. On September 3, 2009, from 9:00 a.m. to 11:00 a.m., media will have theopportunity to preview the new Toronto store. To RSVP, please contact AnneCowans at 416.919.1221, acowans@overcatcommunications.com or Cecille de laCruz at 416.966.9970 ext. 228, cdelacruz@overcatcommunications.com.
Bilibala comments:
It should help Shoppers Drug Mart to further improve its profit margin.
On the other hand, whenever there's expansion plan, a corp usually need to rise debt. To me, Shoppers' debt is quite high and it will increase the credit risk of the company. In today's economy environment, where you can borrow cheaply is fine, but need to keep an eyes on this new store and see how long it will take it to break even and pay back.
7.22.2009
JNJ growth rates
Posted by: grandpagates (IP Logged) [Ignore this user]
Date: July 15, 2009 11:17PM
So JNJ 2Q09 earnings are out. As expected Risperdale and Topamax got hammered by generics. Of interest, is that currency fluctuations were a huge negative drag. Of interest is that the Risperdale and Topamax damage is now largely historical.
So the question is, with so many gurus owning JNJ, is it time to back up the truck and buy? Bear in mind that I get PTSD flashbacks when CEOs make vague promises that new drugs will replace those coming off patent.
I have never seen any estimates about how much JNJ's newer drugs could contribute and what the odds of them are in making it to market. So for the time being, I will temporarily just value their contribution at $0.
What I was able to wrap my brain around was a projection of pharmacuetical sales for 2Q10. I just took that quarterly results from JNJ, projected the plus or minus growth rate for each drug into 2Q10 based on the rate for the last 12 months, and came up with a very approxmate projection. Not very precise, no deep business insights, but at least, it is a number that does not come out of the hat. This was done while ignoring currency fluctuations.
If my arithmetic (See below) is right, which is very questionable at this late hour, pharaceutical sales will go up 5% between 2Q09 and 2Q10.
There is value in doing this by individual drug instead of globally because of the enormous impact of patent expiration.
Noting that consumer sales went up 3% in the last 12 months (ignoring currency fluctuations) and that medical device sales went up 3% in the last 12 months (ingoring currency fluctuation), I then arrive that total JNJ sales will go up 3.5% or so in the next 12 months. Any sales of new drugs by a so called "promising pipeline" would be a kicker bonus. Any improvement of the consumer segment due to a possibly improving economy would be a bonus.
In conclusion, JNJ appears to likely be priced as a fair deal masked by the damage of patent expiration and masked by currency fluctional, with potential upside due to an improved economy and a potential upside due to new drugs. And there is a management that appears to have a history of apparently reasonable investment of earnings (20% ROE), nice earnings growth rate, and nice dividend growth rate. No crazy mergers of 2 struggling companies to come up with one bigger company struggling in more ways.
In brief, this quick exercise seems to confirm that the gurus who hold JNJ know what they are talking about and that the loss of patent damage is history.
I am planning to buy some more.
Date: July 15, 2009 11:17PM
So JNJ 2Q09 earnings are out. As expected Risperdale and Topamax got hammered by generics. Of interest, is that currency fluctuations were a huge negative drag. Of interest is that the Risperdale and Topamax damage is now largely historical.
So the question is, with so many gurus owning JNJ, is it time to back up the truck and buy? Bear in mind that I get PTSD flashbacks when CEOs make vague promises that new drugs will replace those coming off patent.
I have never seen any estimates about how much JNJ's newer drugs could contribute and what the odds of them are in making it to market. So for the time being, I will temporarily just value their contribution at $0.
What I was able to wrap my brain around was a projection of pharmacuetical sales for 2Q10. I just took that quarterly results from JNJ, projected the plus or minus growth rate for each drug into 2Q10 based on the rate for the last 12 months, and came up with a very approxmate projection. Not very precise, no deep business insights, but at least, it is a number that does not come out of the hat. This was done while ignoring currency fluctuations.
If my arithmetic (See below) is right, which is very questionable at this late hour, pharaceutical sales will go up 5% between 2Q09 and 2Q10.
There is value in doing this by individual drug instead of globally because of the enormous impact of patent expiration.
Noting that consumer sales went up 3% in the last 12 months (ignoring currency fluctuations) and that medical device sales went up 3% in the last 12 months (ingoring currency fluctuation), I then arrive that total JNJ sales will go up 3.5% or so in the next 12 months. Any sales of new drugs by a so called "promising pipeline" would be a kicker bonus. Any improvement of the consumer segment due to a possibly improving economy would be a bonus.
In conclusion, JNJ appears to likely be priced as a fair deal masked by the damage of patent expiration and masked by currency fluctional, with potential upside due to an improved economy and a potential upside due to new drugs. And there is a management that appears to have a history of apparently reasonable investment of earnings (20% ROE), nice earnings growth rate, and nice dividend growth rate. No crazy mergers of 2 struggling companies to come up with one bigger company struggling in more ways.
In brief, this quick exercise seems to confirm that the gurus who hold JNJ know what they are talking about and that the loss of patent damage is history.
I am planning to buy some more.
7.15.2009
J&J profit falls but trumps forecasts
Johnson & Johnson posted a 5 percent drop in second-quarter
earnings, but profit and revenue beat analyst forecasts helped
by surprisingly resilient pharmaceutical and consumer product
sales. Revenue took a hit from patent expirations on its drugs
for schizophrenia and epilepsy, but sales of its blockbuster arthritis
drug Remicade were better than expected. The company
earned $3.21 billion, or $1.15 per share. That compared with
$3.37 billion, or $1.18 per share, in the year-earlier period. Analysts
on average expected $1.11 per share, according to
Reuters Estimates. J&J's quarterly revenue fell 7.4 percent to
$15.24 billion, but was $190 million higher than analysts expected.
Sales would have been 6 percentage points higher if not
for the strong dollar, which hurt the value of overseas sales. The
company affirmed its full-year profit forecast of $4.45 to $4.55
per share, which excludes special items.
Bilibala comments
In long run, health care is in need and the service is extremely difficult for other company to copy, so Johnson & Johnson will receive the benefit of it.
2Q results inline with my expectation, i need further analysis to determine the target price
earnings, but profit and revenue beat analyst forecasts helped
by surprisingly resilient pharmaceutical and consumer product
sales. Revenue took a hit from patent expirations on its drugs
for schizophrenia and epilepsy, but sales of its blockbuster arthritis
drug Remicade were better than expected. The company
earned $3.21 billion, or $1.15 per share. That compared with
$3.37 billion, or $1.18 per share, in the year-earlier period. Analysts
on average expected $1.11 per share, according to
Reuters Estimates. J&J's quarterly revenue fell 7.4 percent to
$15.24 billion, but was $190 million higher than analysts expected.
Sales would have been 6 percentage points higher if not
for the strong dollar, which hurt the value of overseas sales. The
company affirmed its full-year profit forecast of $4.45 to $4.55
per share, which excludes special items.
Bilibala comments
In long run, health care is in need and the service is extremely difficult for other company to copy, so Johnson & Johnson will receive the benefit of it.
2Q results inline with my expectation, i need further analysis to determine the target price
6.24.2009
Shoppers on regulation change
Posted: June 24, 2009, 3:00 PM by Jonathan Ratner
Market Call, Shoppers Drug Mart, legislation
Could changes to the dispensing powers of pharmacists be a boon for Shoppers Drug Mart Ltd.?
Analyst Robert Gibson of Octagon Capital notes pending or already enacted legislation across Canada will lead to changes in pay for pharmacists by their home provinces, although there will not be much clarity on the issue until 2010.
“We believe that the fee the pharmacist will get for extending, adapting, or adjusting a prescription, for example, will be less than what doctors are charging for a similar service,” Mr. Gibson wrote in a note to clients, hiking his target price on the stock to $57 from $49.25. He maintained his "buy" rating on the shares. “Thus, it is in the provincial governments’ interest to proceed.”
The services would have to be more profitable than filling prescriptions, Mr. Gibson reasons, or they will not be adopted by the pharmacist.
“We believe Shoppers will push heavily for their pharmacists to embrace these changes, assuming it adds to the bottom line. We also believe this will be a process that evolves over a number of years.”
His target was based on applying a multiple of 18 to his 2010 per share earnings estimate of $3.16.
Hollie Shaw
Bilibala's comments:
Drug store in Canada are all regulatory protected so they can charge regular customers by a higher profit margin than US. With the issue of aging, rising in drug cost and the above change, Shoppers Drug Mart should be able to enjoy great profit and steady growth opportunities.
Market Call, Shoppers Drug Mart, legislation
Could changes to the dispensing powers of pharmacists be a boon for Shoppers Drug Mart Ltd.?
Analyst Robert Gibson of Octagon Capital notes pending or already enacted legislation across Canada will lead to changes in pay for pharmacists by their home provinces, although there will not be much clarity on the issue until 2010.
“We believe that the fee the pharmacist will get for extending, adapting, or adjusting a prescription, for example, will be less than what doctors are charging for a similar service,” Mr. Gibson wrote in a note to clients, hiking his target price on the stock to $57 from $49.25. He maintained his "buy" rating on the shares. “Thus, it is in the provincial governments’ interest to proceed.”
The services would have to be more profitable than filling prescriptions, Mr. Gibson reasons, or they will not be adopted by the pharmacist.
“We believe Shoppers will push heavily for their pharmacists to embrace these changes, assuming it adds to the bottom line. We also believe this will be a process that evolves over a number of years.”
His target was based on applying a multiple of 18 to his 2010 per share earnings estimate of $3.16.
Hollie Shaw
Bilibala's comments:
Drug store in Canada are all regulatory protected so they can charge regular customers by a higher profit margin than US. With the issue of aging, rising in drug cost and the above change, Shoppers Drug Mart should be able to enjoy great profit and steady growth opportunities.
Opinion - can u be a copy cat to beat the original
By Matt Phillips
Can you beat Warren Buffett at his own game?
The Journal’s Brett Arends writes that despite the recent equities rally, some of Buffett’s favorite issues look pretty affordable at the moment:
Mr. Buffett liked oil giant ConocoPhillips (COP) enough to invest $7 billion in the stock through the end of last year, at an average price of $82.55, according to the Berkshire Hathaway annual report. Anyone buying today can get it for about $41.
Mr. Buffett has conceded an “unforced error” in buying this oil stock when oil prices were booming. But that doesn’t mean he has given up on it. In his last comments on the subject a few months ago, he reiterated his belief that demand for energy would remain strong. At current prices ConocoPhillips is about 13 times this year’s forecast earnings, but analysts predict that will drop to a cheap 7 times in 2010. That’s because they believe oil and gas prices will rebound.
He bought Johnson & Johnson at about $62 a share: It’s now about $55, or 12 times likely earnings, yielding 3.5%. He had also invested about $4.3 billion in food company Kraft, at around $33 a share. It’s now around $25, 13 times likely earnings and boosting a hefty 4.7% yield. He had also invested $2.3 billion in US Bancorp at an average price of about $31. Today’s it’s $17.
(Mr. Buffett has added to his positions in both Johnson & Johnson and U.S. Bancorp since.)
Bilibala's comments
In theory, an individual can copy Buffett or copy the best mutual fund managers to build up a portfolio. According to one study, if an individual follow the "what would Buffett do?" approach to purchase and sold exactly what Buffett did in the past 40 years. The rate of return will still be close to 20%, a way higher than the return of the S&P 500 or the average mutual fund.
On the other hand, everyone should do their own study to make sure you are confident enough to hold those stocks in long run. If you are too scare or too greedy in the wrong moment, become a copy cat will make you loss more than earn.
Can you beat Warren Buffett at his own game?
The Journal’s Brett Arends writes that despite the recent equities rally, some of Buffett’s favorite issues look pretty affordable at the moment:
Mr. Buffett liked oil giant ConocoPhillips (COP) enough to invest $7 billion in the stock through the end of last year, at an average price of $82.55, according to the Berkshire Hathaway annual report. Anyone buying today can get it for about $41.
Mr. Buffett has conceded an “unforced error” in buying this oil stock when oil prices were booming. But that doesn’t mean he has given up on it. In his last comments on the subject a few months ago, he reiterated his belief that demand for energy would remain strong. At current prices ConocoPhillips is about 13 times this year’s forecast earnings, but analysts predict that will drop to a cheap 7 times in 2010. That’s because they believe oil and gas prices will rebound.
He bought Johnson & Johnson at about $62 a share: It’s now about $55, or 12 times likely earnings, yielding 3.5%. He had also invested about $4.3 billion in food company Kraft, at around $33 a share. It’s now around $25, 13 times likely earnings and boosting a hefty 4.7% yield. He had also invested $2.3 billion in US Bancorp at an average price of about $31. Today’s it’s $17.
(Mr. Buffett has added to his positions in both Johnson & Johnson and U.S. Bancorp since.)
Bilibala's comments
In theory, an individual can copy Buffett or copy the best mutual fund managers to build up a portfolio. According to one study, if an individual follow the "what would Buffett do?" approach to purchase and sold exactly what Buffett did in the past 40 years. The rate of return will still be close to 20%, a way higher than the return of the S&P 500 or the average mutual fund.
On the other hand, everyone should do their own study to make sure you are confident enough to hold those stocks in long run. If you are too scare or too greedy in the wrong moment, become a copy cat will make you loss more than earn.
4.15.2009
Johnson Johnson 1q09 results
Overview
Johnson & Johnson is a is a leader in the pharmaceutical, medical device and consumer
products industries, operate in 3 primary lines of Pharmaceuticals (38.5% of sales), Medical Devices and Diagnostics (36.8%) and Consumer Products (24.7%).
1Q09 Results (vs 1Q08)
1. Sales down 7.2% to $15B
Johnson & Johnson is a is a leader in the pharmaceutical, medical device and consumer
products industries, operate in 3 primary lines of Pharmaceuticals (38.5% of sales), Medical Devices and Diagnostics (36.8%) and Consumer Products (24.7%).
1Q09 Results (vs 1Q08)
1. Sales down 7.2% to $15B
- Sales is in an decreasing trend since 2q08 mainly due to the negative impact of currency;
- Operational results declined 1.2% and the negative impact of currency was 6.0%. Domestic sales down 5.0%, International sales down 9.6%, reflecting operational growth up 3.0% and a negative currency impact of 12.6%
- Geographically, operating results down 5.0% in US, down 0.2% in Europe, up 4.5% in America (ex US) and up 8.5% in Asia Pacific & Africa
- Patent loss on Risperdal is one of the key driver for the sales down, sales loss 64.2% or $534M in 1q09;
- Consumer product sales down 5.1% in US.
2. EPS was $1.26 same to 1q08
- Gross margin keep at 70 - 72% range;
- Net margin up to 23.3% from 22.2% in 1q07 & from 17.9% in 4q08
- Expenses cut in R&D as well as S&A during 1q09 compare to trend, I guess it is due to weak economy outlook
3. Balance Sheet
- N/A
Risk
- Patent expirations on JNJ's major drugs;
- Regulatory delays or non-approvals on JNJ's new drugs;
- Competition in generic drugs market;
Bilibala with Johnson & Johnson
- My dad & I use Listerine everyday, we found it is the best oral care product;
- When something or someone cause me headache, I will take Tylenol;
- There is a JNJ office very close to my home sweet home.
Comments:
BUY, fair value at US$74.72.
Total sales have 2 drivers: price and volume. Since JNJ consumer product is fall under the consumer staple sector, usually one of the strongest defensive sector during recession. If JNJ's consumer sales down is mainly due to a volume decline. The recession is in deep trouble. If it is due to price discount to business partners (Wal-Mart, Target etc) and customers, then it only reflect the business decision during recession to boost sales volume. In JNJ, that's mix of the two.2.13.2009
Shoppers' Drug Mart 2008 results
The largest retail drug store in Canada, Ontario & Quebec.
- Fair, 4q08 revenue up 15%, EPS up 14.3%
- Good, 2008 revenue up 11%, EPS up 14.5%
- Fair, retail store network up 12%
- Bad, During the year, SC rise debt by $400M
In weak economy, SC's result is awesome, but since the stock price remain quite high compare to others.
Shopper need to rise debt in order to keep its store network growth in 10-11% in future, also, I still want to wait till I see how bad the Canada economy will be before I make a decision to invest in SC.
For now, I will give SC a HOLD.
11.11.2008
Corp info: Shoppers Durg Mart 3q08 results
Finl data: 3Q08 remain strong, sales up 9.8% compare to 3q07, net income up 15.6%. Mainly due to total store square feet rise 12.6% and gross margin improved from 10.7% to 11.2%.
Issues: More capital spending in future if Shopper would like to keep up the growing momentum under the economy difficult situation. On the other hand, it continue to have the dominate position for drug store in Canada. Plus job creation, profit growth in health sector remain healthy at this stage compare to all other sectors.
Comment: Based on estimate 08 EPS $2.61, current price seem a quite higher compare to US drug store such as CVS Caremark or Walgreen. Therefore, from a value investing prospective, it only worth $34per share. If I add growth as one of the evaluation factor, it should worth $57.42 based on historical P/E ratio.
Issues: More capital spending in future if Shopper would like to keep up the growing momentum under the economy difficult situation. On the other hand, it continue to have the dominate position for drug store in Canada. Plus job creation, profit growth in health sector remain healthy at this stage compare to all other sectors.
Comment: Based on estimate 08 EPS $2.61, current price seem a quite higher compare to US drug store such as CVS Caremark or Walgreen. Therefore, from a value investing prospective, it only worth $34per share. If I add growth as one of the evaluation factor, it should worth $57.42 based on historical P/E ratio.
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