AmerisourceBergen Corp. (NYSE:ABC)

Producing cash with a high CROIC and ROIC. This looks to be a well managed company (low Foolish Flow Ratios), and FCF is out-pacing NI. TTM Owner Earnings is roughly 17% of market cap. Looks cheap, and profitable.

High ROE and ROIC, low P/S and moderate PE. Churning out cash, margins are growing, and earnings quality looks good. Found off of a modified Greenblatt Screen.

12/18

Solid management, ridiculously boring but fairly valued company, but that may be what we need in a post-bubble economy. I put 2-4 years, but realistically the holding period for something like this is until the next secular bull market (??).

Stifel pick for one, also at a great price.

THEY HAVE BEEN A FAIRLY CONSISTENT PLODDER AND HAVE BEEN USING PROFITS TO BUY BACK SHARES - THEY ARE IN A "SAFER" SEGMENT OF HEALTHCARE THAT LIKELY WILL NOT BE MUTILATED BY OBAMACARE REFORMS

proven track record in uptrend

Severely outperforming both sector and market on a technical basis. Reported a nice quarter, guided well, and as a pharma DISTRIBUTOR is positioned in about as good of an industry as you can be in this nation of pill-popping decrepit fatasses. I like the fact that these guys DISTRIBUTE the drugs, as opposed to making them. Drug makers of course are prone to all sorts of calamities relating to clinical trials and patent expiration and this frustrates the evil designs of technically-obsessed folks like me.

ANALYST CONSENSUS SCREEN on 5/7 (ABC CVX DE OXY)

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

GENERICS/LOW PRICES

(O1)

mfi pick 2

Morningstar pick

good drug distrubution

1 3-6-9.

A nice pennant has formed around $35! Buy now and hold for a few weeks

Not an insane value, but still looks pretty cheap.

If I were head of a hospital looking to outsource the ordering, warehousing, and dealing with deliveries of medicines, I would take a long hard look at the Gross Operating Profit of the candidate companies. AmerisourceBergen Corporation has a very stable Gross Operating Profit.

No matter how I slice it, this one seems to be a value.