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Here's Why You Should Add Phibro (PAHC) to Your Portfolio Now
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Phibro Animal Health Corporation (PAHC - Free Report) has been gaining from strength in its diverse animal health offerings and continued expansion in emerging markets. The robust performance of the company’s vaccine business buoys optimism. A stable solvency position is an added plus. Yet, tough competition and foreign exchange headwinds raise apprehension.
Over the past year, the Zacks Rank #2 (Buy) stock has lost 18.8% compared with the 19.7% fall of the industry and 6.2% rise of the S&P 500.
The renowned medical device company has a market capitalization of $816.15 million. The company‘s earnings for the fiscal second quarter surpassed the Zacks Consensus Estimate by 12.1%.
The company’s expected earnings growth for the next year is at 4.4%, compared with the industry’s growth expectation of 20.7% and the S&P 500’s estimated 9.9% growth for the next year.
Image Source: Zacks Investment Research
Let’s delve deeper.
Factors At Play
Diversified Product Portfolio: We are upbeat about Phibro’s key animal health offerings, including medicated feed additives and nutritional specialty products, which help improve animal nutrition. The company’s leading product franchise, Stafac/V-Max/Eskalin, is approved in more than 30 countries for use in poultry and swine. Similarly, its nutritional product offerings, such as OmniGen-AF, are increasingly used in the global dairy industry. The company also manufactures vaccines that protect animals from viral and bacterial disease challenges.
Potential in Emerging Markets: Phibro’s existing operations and established sales, marketing, and distribution network in more than 75 countries provide ample global growth scope. The company has continued to invest in Far East Asia, where huge growth is expected in the poultry and dairy industries. Currently, the company is expanding its dairy business in the markets of Australia, Brazil and Mexico, raising optimism.
Prospering Vaccine Business: In the fiscal second quarter, Phibro registered a 19.7% improvement in vaccine net sales, driven primarily by increased domestic and international volumes. The company’s vaccine business is witnessing higher domestic volumes as well as increased demand in the Asia-Pacific region. The acquisition of the assets of KoVax-- an Israel-based vaccine developer and manufacturer -- has strengthened the company’s aquaculture products portfolio. Another notable buyout of the company was that of MJ Biologic’s swine vaccines in the United States. Phirbo’s new vaccine facility in Sligo, Ireland, is likely to further boost its vaccine business.
Stable Solvency Structure: Phibro exited the fiscal second quarter with cash and short-term investments of $95 million. Meanwhile, total debt came up to $400 million, much higher than the cash and short-term investments level. However, if we go by the company's near-term-payable debt level of $13 million, it is pretty low compared to the cash in hand. This is good news in terms of the company’s solvency position, particularly during the ongoing pandemic when it is majorly facing manufacturing and supply halt globally.
Downsides
Competitive Landscape: Phibro faces threats from a substantial number of global and regional competitors with respect to its major products. The company’s competitive position is based principally on its product registrations, customer service and support, breadth of product line, product quality, manufacturing technology, facility location, and product prices.
Forex Woes: Phibro is subject to currency risk to the extent that its costs are denominated in currencies other than those in which the company earns revenues. In its fiscal second-quarter earnings call, the company noted that despite witnessing a foreign currency gain, volatility in foreign currency exchange rates continues to impact its performance.
Estimate Trend
Over the past 60 days, the Zacks Consensus Estimate for Phibro’s fiscal 2022 earnings has moved 7.8% north to $1.38.
The Zacks Consensus Estimate for its fiscal 2022 revenues is pegged at $913.66 million, suggesting a 9.6% rise from the fiscal 2021 reported number.
Key Picks
Other top-ranked stocks in the broader medical space are Henry Schein, Inc. (HSIC - Free Report) , McKesson Corporation (MCK - Free Report) and AmerisourceBergen Corporation .
Henry Schein has an estimated long-term growth rate of 11.8%. Henry Schein’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.5%. It carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Henry Schein has outperformed the industry over the past year. HSIC has gained 26.5% compared with the industry’s 2.8% rise over the past year.
McKesson has a long-term earnings growth rate of 11.8%. McKesson’s earnings surpassed estimates in the trailing four quarters, delivering a surprise of 20.6%, on average. It carries a Zacks Rank #2.
McKesson has outperformed the industry over the past year. MCK has gained 52.7% against 2.7% industry growth in the said period.
AmerisourceBergen has a long-term earnings growth rate of 8.2%. In the trailing four quarters, AmerisourceBergen’s earnings surpassed estimates in three and missed in one, delivering an average surprise of 2.3%. The stock currently sports a Zacks Rank #2.
AmerisourceBergen has outperformed its industry in the past year, gaining 29.5% versus the industry’s 2.8% rise.
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Here's Why You Should Add Phibro (PAHC) to Your Portfolio Now
Phibro Animal Health Corporation (PAHC - Free Report) has been gaining from strength in its diverse animal health offerings and continued expansion in emerging markets. The robust performance of the company’s vaccine business buoys optimism. A stable solvency position is an added plus. Yet, tough competition and foreign exchange headwinds raise apprehension.
Over the past year, the Zacks Rank #2 (Buy) stock has lost 18.8% compared with the 19.7% fall of the industry and 6.2% rise of the S&P 500.
The renowned medical device company has a market capitalization of $816.15 million. The company‘s earnings for the fiscal second quarter surpassed the Zacks Consensus Estimate by 12.1%.
The company’s expected earnings growth for the next year is at 4.4%, compared with the industry’s growth expectation of 20.7% and the S&P 500’s estimated 9.9% growth for the next year.
Image Source: Zacks Investment Research
Let’s delve deeper.
Factors At Play
Diversified Product Portfolio: We are upbeat about Phibro’s key animal health offerings, including medicated feed additives and nutritional specialty products, which help improve animal nutrition. The company’s leading product franchise, Stafac/V-Max/Eskalin, is approved in more than 30 countries for use in poultry and swine. Similarly, its nutritional product offerings, such as OmniGen-AF, are increasingly used in the global dairy industry. The company also manufactures vaccines that protect animals from viral and bacterial disease challenges.
Potential in Emerging Markets: Phibro’s existing operations and established sales, marketing, and distribution network in more than 75 countries provide ample global growth scope. The company has continued to invest in Far East Asia, where huge growth is expected in the poultry and dairy industries. Currently, the company is expanding its dairy business in the markets of Australia, Brazil and Mexico, raising optimism.
Prospering Vaccine Business: In the fiscal second quarter, Phibro registered a 19.7% improvement in vaccine net sales, driven primarily by increased domestic and international volumes. The company’s vaccine business is witnessing higher domestic volumes as well as increased demand in the Asia-Pacific region. The acquisition of the assets of KoVax-- an Israel-based vaccine developer and manufacturer -- has strengthened the company’s aquaculture products portfolio. Another notable buyout of the company was that of MJ Biologic’s swine vaccines in the United States. Phirbo’s new vaccine facility in Sligo, Ireland, is likely to further boost its vaccine business.
Stable Solvency Structure: Phibro exited the fiscal second quarter with cash and short-term investments of $95 million. Meanwhile, total debt came up to $400 million, much higher than the cash and short-term investments level. However, if we go by the company's near-term-payable debt level of $13 million, it is pretty low compared to the cash in hand. This is good news in terms of the company’s solvency position, particularly during the ongoing pandemic when it is majorly facing manufacturing and supply halt globally.
Downsides
Competitive Landscape: Phibro faces threats from a substantial number of global and regional competitors with respect to its major products. The company’s competitive position is based principally on its product registrations, customer service and support, breadth of product line, product quality, manufacturing technology, facility location, and product prices.
Forex Woes: Phibro is subject to currency risk to the extent that its costs are denominated in currencies other than those in which the company earns revenues. In its fiscal second-quarter earnings call, the company noted that despite witnessing a foreign currency gain, volatility in foreign currency exchange rates continues to impact its performance.
Estimate Trend
Over the past 60 days, the Zacks Consensus Estimate for Phibro’s fiscal 2022 earnings has moved 7.8% north to $1.38.
The Zacks Consensus Estimate for its fiscal 2022 revenues is pegged at $913.66 million, suggesting a 9.6% rise from the fiscal 2021 reported number.
Key Picks
Other top-ranked stocks in the broader medical space are Henry Schein, Inc. (HSIC - Free Report) , McKesson Corporation (MCK - Free Report) and AmerisourceBergen Corporation .
Henry Schein has an estimated long-term growth rate of 11.8%. Henry Schein’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.5%. It carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Henry Schein has outperformed the industry over the past year. HSIC has gained 26.5% compared with the industry’s 2.8% rise over the past year.
McKesson has a long-term earnings growth rate of 11.8%. McKesson’s earnings surpassed estimates in the trailing four quarters, delivering a surprise of 20.6%, on average. It carries a Zacks Rank #2.
McKesson has outperformed the industry over the past year. MCK has gained 52.7% against 2.7% industry growth in the said period.
AmerisourceBergen has a long-term earnings growth rate of 8.2%. In the trailing four quarters, AmerisourceBergen’s earnings surpassed estimates in three and missed in one, delivering an average surprise of 2.3%. The stock currently sports a Zacks Rank #2.
AmerisourceBergen has outperformed its industry in the past year, gaining 29.5% versus the industry’s 2.8% rise.