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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (19482)	7/27/2004 9:26:21 PM
From: Spekulatius	Respond to of 78515

re CAH: I do own ABC and I am not too concerned about the drug distribution business. Sure, gross margins have been going down for years but so have costs and net margins for some of the players have actually improved. The pharma companies are cracking down on speculative buying ahead of price increases, but this is a practice that ABC has not been involved that much. What i see is a low risk distribution business with the underlying growing by low double digits. At the current valuations for distributors, i consider this a good value. CAH is a little different than MCK and ABC as it has some higher margin business with medical devices as well as manufacturing component (sterilization etc.). It's probably a company that will not look as good going forward as it used to in the past, but at a PE around 11 (if current estimates are correct) the expectations are very low as well. Worth a buy, IMO (although i don't have a position right now).