AmerisourceBergen Corp. (NYSE:ABC)

dnblack (34.64) Submitted: 4/30/2010 12:20:22 AM : Start Price: $26.30 ABC Score: +22.31

DCF for this shows it to be overvalued. Revenue growth has been 7% for the last 8 years with .99 R^2 value. Speculation about increased drug sales is driving this price up, but nothing historically indicates that it belongs over $28. I think I will end this up thumb pretty soon (though it is a quality company and I would not down thumb it until it is much more expensive). This one is a darling of the analysts though: Schwab - A, Credite Suisse - BUY, Ned Davis - BUY, Arugs 12-month- BUY, S&P - 4/5 stars, Reuters - OUTPERFORM, MarketEdge - BUY. The valuation is pushing it into story stock territory though and I don't expect it to hold its value at the next large market downturn.

       EPS Growth Revenue Growth Manual Growth   No Growth
       11.06%   6.86%   10.00%   0.00%
MRFY EPS   $1.69   $22.73   $19.32   $21.83   $14.69
3-yr avg. EPS   $1.46   $19.68   $16.73   $18.90   $12.72
8-yr avg. EPS   $1.12   $15.00   $12.75   $14.40   $9.69
Intercept EPS   $1.52   $20.41   $17.35   $19.60   $13.19
FYF EPS    $1.69   $22.67   $19.27   $21.77   $14.65
FYF+1 EPS   $1.87   $25.18   $21.40   $24.17   $16.27
Manual EPS   $2.10   $28.25   $24.01   $27.12   $18.26

And the BlackMagic score: 18/36 (pretty average):

SECTION A - Company Quality   
P/E (TTM) <= 20    1
P/E (TTM) <= 10    0
P/B (MRQ) <= 2     0
P/B (MRQ) <= 1    0
P/Cash Flow (TTM) <= 15   1
Dividend Yield >= 1%   1
Dividend Yield >= 4%   0
Net Margin (TTM) > 0%   1
Net Margin (TTM) >= 15%   0
Quick Ratio >= 1   0
Current Ratio >= 1   1
Debt/Equity < 1   1
No negative EPS last 3 years   1
No negative EPS last 8 years   1
Shares outstanding last year <= year before   1
Cash from operations (MRFY) > net income (MRFY)   0
No negative EPS last 8 quarters   1
   
TOTAL (A)    10 of   17

SECTION B - Valuation   
EPS (MRFY) > EPS (3-yr avg)   1
EPS (3-yr avg) > EPS (8-yr avg)   1
Average DPV >= Price   0
Average DPV >= Price*1.5   0
DCF value (3-yr avg EPS, EPS growth) >= Price   0
DCF value (3-yr avg EPS, Rev Growth) >= Price   0
DCF value (5-yr avg EPS, EPS growth) >= Price   0
DCF value (5-yr avg EPS, Rev growth) >= Price   0
DCF value (MRFY EPS, 0% growth) >= Price   0
DCF value (3-yr avg EPS, 0% growth) >= Price   0
DCF value (5-yr avg EPS, 0% growth) >= Price   0
PEG using 8 year revenue growth < 1   1
PEG using 8 year EPS growth < 1   0

TOTAL (B)   3 of 13

SECTION C - Market Sentiment   
EPS (FYF) > 0   1
P/E (FYF) < P/E (MRFY)   1
Motley Fool CAPS >= 3   1
Schwab A, B, or C   1
Ned Davis BUY   1
Insider ownership > 10%   0

TOTAL (C) 5/6