Summit TV

Transcript:
I’m going with pharmaceutical company Adcock Ingram. It’s currently trading at about R51. That’s a business when they reported results revenue was up quite a bit and earnings was up about 60% to R4.84. That’s a business with strong generic brands across the board. Also, it has potential in terms of the roll-out in the public sector in terms of ARV tenders. This is a business that I think into next year could give you earnings in excess of 30% - on that the PE is about eight or nine. It’s a virtually ungeared balance sheet with cash of about R383million. If they pay out a dividend next year on 2.5 times cover you could get a yield of 5%. I think the earnings quality is good - it’s probably a defensive share into next year and one that we still think is a value proposition.

Broker:
Nesagan Chetty, RMB Asset Managers

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