$4.42
0.25 (+6.00%)
Caraco Pharmaceutical Laboratories Ltd. (CPD)
CAPS Rating:
The Company is engaged in the business of developing, manufacturing, marketing and distributing generic and private-label pharmaceuticals to the wholesalers, distributors, warehousing and non-warehousing chain drugstores and managed care providers.
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I love this small cap. Their revenue growth is rock solid 30%/year for the last 4 years. It's a contrarian business model in the pharmacauticals business.
They're not out to produce *any* new drugs. Instead, they control costs better than anyone and pick and choose which generic drugs they want to make, from the many fine drugs who's patents are expiring soon. (It's like reliving the early days of the pharam boom, 18 years later)
They are highly automated, get their active ingredients from a parent company in India, and have set up shop in Detroit, the cheap manufacturing space, low-overhead capital of North America.
They manage consistent 45% gross margins. Combine that with a 30% growth rate and their current below-radar size and you have a 5-bagger in the making.
They play some games with non-cash R&D expenses, that depress reported earnings, but the cash flow tells a consistant story.
I want to hold this one for 20 years....