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This company is a provider of institutional pharmacy services to the elderly, chronically ill and disabled in long-term care and alternate site settings, and is attractive for the following reasons * PharMerica is the largest institutional pharmacy provider in four of the five states with the highest population of elderly people, and its network of 120 institutional pharmacies covers a geographic area that includes over 80% of the nation's long-term care beds. * The pharmacy services industry is fragmented, and the company is becoming a major consolidator in the industry. DOSE is one of the two largest institutional pharmacy providers in the country. * DOSE has a price to earnings ratio of less than 10, a price to book ratio of 0.7, a current ratio over three, and a price to sales ratio of 0.4. Revenues have grown strongly over the last few years as a result of acquisitions and internal growth. * Millions of aging Americans are being moved out of hospitals and nursing homes sooner, and need home delivery of their pills and medical equipment. Currently, 85 percent of all drugs are purchased by individuals or their caretakers at the corner drugstore. PharMerica wants to establish itself as the drug supplier to the elderly from the minute they leave an acute-care hospital. * The industry is growing at 10% a year, but as one of the largest players in the industry and expanding it can use its size to negotiate volume discounts and reduce the cost of service, allowing DOSE to grow earnings in excess of industry averages. * DOSE is making acquisitions in the industry, allowing the company to streamline operations and reduce overhead by consolidating same-area pharmacies. DOSE is a low cost provider giving it a competitive edge. * The company has little exposure to Asia, Latin America, or Russian markets, and the sector should continue to grow even in difficult economic times. * Eleven analysts cover the stock, with seven rating the company as a buy or strong buy. The consensus long term growth rate of the nine analysts who have an estimate is 22.5%, well above the price-to-earnings ratio. * The consensus earnings estimate for fiscal year 1998 is 50 cents, and for fiscal year 1999 is $0.62. The number of analysts covering this company is positive should growth continue as expected. * Senior citizens represent around 12% of the population, but consume around 39% of the prescriptions dispensed. In addition, the number of people over the age of 85 in the U.S. currently is around three million and will grow to over five million in the next five years - and this age group relies on prescription drugs more than any other segment of the population. Nursing home care for this sector, and the associated medications required, will make this a prime market for PharMerica. Links: DOSE Financials: dailystocks.net One Year Chart: dailystocks.net Company News: quicken.excite.com Company Website: pharmerica.com Lone Star analysis: members.aol.com Recent St.Petersburg Times article: members.aol.com Joe | ||||||||||||
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