On Feb 8, we issued an updated research report on AmerisourceBergen Corporation (ABC - Free Report) . The company continues to gain form solid organic growth, World Courier Business, H.D. Smith Acquisition and deal with Walgreens.
Based in Chesterbrook, PA, AmerisourceBergen is one of the world’s largest pharmaceutical services companies, focusing on provision of drug distribution and related services to reduce health care costs and improve patient outcomes.
In recent times, the company has been delivering stellar performances on the back of the World Courier Business alliance. World Courier’s position as the leader in global specialty logistics services drove volume growth and overall performance.
Operational efficiency of the company is also a key catalyst. It offers an innovative platform and invested nearly $1 billion in the last two years in capital expenditures. The company enjoys the leverage scale, which enables it to provide the best-in-class customer service.
Acquisition-driven growth strategy has also been a growth propeller. Recently, the company completed the acquisition of H.D. Smith — the largest independent wholesaler in the United States — for $815 million in cash.
In this regard we note that the company’s first-quarter fiscal 2018 results marks its 16th consecutive quarter with 10% or greater revenue growth. The generic product volume growth is being driven by the company’s focus and strategic efforts.
Over the last year, AmerisourceBergen had an unfavorable run in the broader industry. The stock lost 0.1% against the industry’s rally of 11.6%. The company’s commercial business continues to face pressure. High bad debts are a concern.
Zacks Rank & Other Stocks to Consider
The stock carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space are Amphastar Pharmaceuticals (AMPH - Free Report) , BIOVERATIV (BIVV - Free Report) and HCA Healthcare (HCA - Free Report) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank Stocks Here.
Amphastar has an impressive expected long-term growth rate of 25%. In the last six months, the stock has returned 16.9% against the industry’s decline.
BIOVERATIV has an expected long-term growth rate of 14%. The stock has returned a whopping 92.2% compared with its industry’s rally.
HCA has a long-term projected growth rate of 11.5%. Over the last six months, the stock has returned 23.3% compared with the industry’s gain.
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