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Look look look look look….$$$MR. MARKET$$$ has done it again. I picked another HUGE winner and made lots of quatloops so I can smoke big cigars, drink tousands of beers…TOUSAND! Golfing, drinking freeing my mind…you? You? YOU???
Today I sold PRGO at 111.66. That’s a 19% gain over my purchase price of 93.70. Did you do that? YOU? YOU??? YOU???????
Over the same period, the S&P 500 did nothing…..NAHTHING…..a 0.0% return. What would you do, would you rather make 19% or would you rather make NAHTHING. $$$MR. MARKET$$$ is like a salmon swimming against the tide. If the stock market goes down, $$$MR. MARKET$$$ makes money. If the stock market goes up, $$$MR. MARKET$$$ makes piles of money…ha ha ha it’s so easy I am laughing so hard my tummy hurts. I need Tums.
Bring me your finest meats and cheeses. If you want more picks, you better tell me now or else no more picks for you!
$$$MR. MARKET$$$
================================================== ===================================
07-26-2011, 10:24 PM
mrmarket
Administrator
Join Date: Sep 2003
Posts: 4,076
PRGO ==> The Sweltering Winner!
When $$$MR. MARKET$$$ was a first time home owner in Old Bridge, NJ (right off of Exit 9) his kitchen and family had a nice shiny linoleum floor. Now this floor didn’t stay shiny very long and pretty soon $$$MR. MARKET$$$’s spawn were peeling up the corners and eating them for dessert (they must have thought it was lebne). Anyway, the order of the day was to get hardwood floors.
Now $$$MR. MARKET$$$ has never been known to be very extravagant when it came to home furnishings, so when he saw the price of wood floors, he opted for a less expensive alternative. That’s right, $$$MR. MARKET$$$ had Pergo fake wood floors put in.
Now truth be told, these floors looked pretty snappy, but after a few body slams and elbow drops off of the top rope, the floor got kind of, how do you say, bubbly? Never mind all that. Not soon after, $$$MR. MARKET$$$ sold the house and the new owner put in a swimming pool in the back yard. So everyone was happy.
The only reason I ever thought of Pergo again, was because my newest stock pick is Perrigo Company (PRGO). PRGO has nothing to do with Pergo the floor. Instead, it makes and sells so many different products that its stock price is going to go through the ceiling. That’s why I like it.
In 1887 Luther Perrigo, the proprietor of a general store and apple-drying business, had the idea to package and distribute patented medicines and household items for country stores. Located in Allegan, Michigan, the L. Perrigo Company enjoyed steady growth, and by the early 1920s as many as 50 Perrigo salesmen were calling on rural stores throughout the Midwest. The company then developed the “private label” concept as a way to build customer loyalty. For no additional cost, Perrigo offered to imprint the individual store’s name on the labels for epsom salts, sweet oil, bay rum and dozens of other “wets and drys” stocked in general stores of that era.
In the mid-1930s, Perrigo landed its first, large private-label customer, the K & W group, a buying organization that grew into the People’s Drug Store chain. At about the same time, Perrigo began its manufacturing operation, laying a strong foundation for rapid future growth.
Over the past 25 years national and regional supermarket, drug store and mass merchandise retail chains experienced tremendous growth. As retailers grew, so did their presence in the store-brand arena, as they strove to build customer loyalty with products sold under their own company labels, just as Luther Perrigo surmised they would. Perrigo grew as well, acquiring several businesses throughout the world to augment its position in the store-brand industry. Perrigo is now a leader in producing and distributing store-brand versions of popular over-the-counter medications sold at Wal-Mart, Target, CVS, Walgreen and other major retailers.
The company expanded its product portfolio to include generic prescription pharmaceuticals, creating a more diversified health-care company. To expedite the growth of the generics business, in March 2005 Perrigo acquired Agis Industries, adding their products, pipeline and proprietary technologies to our consumer health-care business.
On a pro forma basis, sales for Agis and Perrigo exceed $1.3 billion. The combined company employs 7,000 people worldwide, with manufacturing and logistics facilities in the United States, Israel, United Kingdom, Mexico, Germany and China. And that, my friends, is how you make an idea fly.
Today I bought PRGO at 93.70 I will sell it in 4 – 6 weeks at 107.94. Here’s why I like PRGO:
First of all, I like the chart.
Now this chart may be a little rickety when compared to other great $$$MR. MARKET$$$ winners such as FOSL. However, it’s important to keep in mind the engine of earnings growth that this company has become. Because of this, PRGO stock is up 70% in the last 12 months, and I expect this trend to continue. This ain’t no startup. Perrigo is one of the 5 largest Pharmaceutical companies in the world.
First of all, look at its revenue growth:
YEAR Revenue, Millions $
2001 753
2002 826
2003 827
2004 898
2005 1024
2006 1367
2007 1447
2008 1822
2009 2007
2010 2269
That’s right…for the last 10 years, this company has grown its revenue successively each and every year. That’s the sign of a successful company. Now who in their right mind would ever suggest that this trend would not continue? In the most recent quarter, revenues are up 22% year on year. EPS are up 41% year on year. Both Gross Margin and Operating Margin are on the rise, meaning that while revenues grow they are selling more of the higher margin items. PRGO has a 3 year CAGR revenue of 18% and 3 year income CAGR of 47%.
Perrigo Company, through its subsidiaries, develops, manufactures, and distributes over-the-counter (OTC) and generic prescription (Rx) pharmaceuticals, nutritional products, infant formulas, active pharmaceutical ingredients (API), and pharmaceutical and medical diagnostic products worldwide. It operates in four segments: Consumer Healthcare, Nutritionals, Rx Pharmaceuticals, and API. The Consumer Healthcare segment offers OTC pharmaceutical products, including analgesics, smoking cessation, gastrointestinal, cough/cold/allergy/sinus, first aid, and feminine hygiene products. The Nutritionals segment provides infant formula products, infant and toddler foods, oral electrolyte solution products, and vitamin, mineral, and dietary supplement products. The Rx Pharmaceuticals segment manufactures and markets a portfolio of generic prescription drug products, including creams, ointments, lotions, gels, shampoos, foams, suppositories, sprays, liquids, suspensions, and solutions, as well as nasal sprays, oral liquids, and transdermal products. The API segment develops, manufactures, and markets API used by the generic drug industry and branded pharmaceutical companies. Perrigo Company also manufactures and markets branded prescription drugs; and imports pharmaceutical, diagnostics, and other medical products. The company has collaborative agreements with Medicis Pharmaceutical Corporation, Medimetriks Pharmaceuticals, and Cobrek Pharmaceuticals. Its customers primarily include retail drug companies, supermarket, mass merchandise chains, chain drug stores, wholesalers, distributors, hospital systems, and group purchasing organizations.
Before you lose the forest through the trees, I think it’s important to focus on the generic prescription component. Over the last decade or more, American consumers have shown a willingness to substitute store-brand products for the branded originals. Perrigo’s largest division is its Consumer Health Care division which represents over 60% of the revenues. Here’s where it gets REALLY interesting. There are over $10 Billion in potential branded sales from RX to Over the Counter switches in the next 5 years. In FY 2011 alone, we’re going to see generic versions of Allegra, Zantac, Mucinex, Aleve, and some nicotine coated gums.
Speaking of Nicotine gum…here’s the beauty of in store brands. If you sell Nicorette gum on your shelf, you can sell a box for $70 but its cost is $57. So your margin is only 13 bucks or 20% profit. If you sell CVS brand gum, the retail price is only $53 but its cost is only $23.50, That means your profit per box ($29.50 or 56%) is better than your name brand and the consumer saves 26%. So the store makes MORE money on the LESS EXPENSIVE items. Consumer is happy…store is happy. Now where do you think growth is going to come from in these tough times…hmmmmm? As Rx medicine switches to OTC medicine, this will continue to feed this machine.
Non-prescription pharmacy products like painkillers and cough and cold medicines are Perrigo's biggest lines. The company sells versions of such popular brand names as Advil, Robitussin, Sudafed and Tums.
Other growth drivers are the brand share growth and also over 50 new products will be launched this year. Got to take a poo and want some Miralax? With 5 new OTC approvals, Perrigo will have 90% of the “Clear Lax” market. Can you smell the chemistry here? Store brand MiraLax has increased to 42% penetration in the first year of product launch. Yeah…go Clear Lax..make you go go go!
Lots more to come. We got Nexium, Protonix and Prevacid coming up. That’s $15 billion right there in sales. I spent $500 on a bottle of Prevacid last time. It’s so expensive, now I only take it before I go to Vegas. I can’t wait for the generic junk to come out. Store brands are going nuts as makers of prescription products seek and win FDA approval to sell them over the counter. Once the manufacturer of a patented drug wins such approval, Perrigo is quick to market with its own store-brand version.
Other products ready for switch include Statins ($17 billion), Asthma ($5 billion), and Erectile Dysfunction ($3 billion)…yea..love that one..time to give good wood on the cheap. Perrigo will set up and register generic OTCs for reimbursement through public and private health plans. They will then leverage their portfolio and pipeline of OTC products for generic substitution when appropriate. In fact, all Perrigo OTC’s are registered for reimbursement.
They have been growing by acquisition as well. Today Perrigo bought Paddock ($200 million of sales) and said the acquisition of Paddock would bolster its portfolio of specialty generic drugs, or drugs that require special handling. Specialty drugs are one of the fastest-growing parts of the pharmaceutical market.
It all flows through to the earnings.
Third Quarter Results
Net sales from continuing operations for the third quarter of fiscal 2011 were approximately $692 million, an increase of 29% over fiscal 2010. The increase was driven primarily by the acquisitions of PBM Holdings, Inc. (PBM) and Orion Laboratories Pty Ltd. (Orion), as well as $44 million in new product sales. Reported income from continuing operations was approximately $92 million, or $0.98 per share, a strong increase over $62 million, or $0.66 per share, a year ago. Excluding charges as outlined in Table I at the end of this release, third quarter fiscal 2011 adjusted income from continuing operations was $100 million, or $1.07 per share.
Nine Months Results
Net sales from continuing operations for the first nine months of fiscal 2011 were $2,050 million, an increase of 24% over fiscal 2010. The increase was driven primarily by strong results in the Rx and Nutritionals segments and included consolidated new product sales of approximately $156 million. Reported gross profit was approximately $703 million, up 28% over last year, and the reported gross margin was 34.3%, up from 33.3% last year. Reported operating margin increased 220 basis points to 17.9%, and adjusted operating margin increased 140 basis points to 19.7%. Reported income from continuing operations was $255 million, an increase of 45%. Adjusted income from continuing operations was $280 million, or an increase of 34%.
In terms of the balance sheet, Perrigo has $1.381 billion in current assets balanced against $907 million in current liabilities. This generates a current ratio of 1.52. Generally current ratios of 1.5 or higher suggest a healthy, at least short-term, financial health. Perrigo has total assets of $3.09 billion compared to total liabilities of $2.01 billion. Although Perrigo’s total debt did increase from last year on some of its acquisitions, its cash and equivalents jumping $182 million to $498 million. The company’s debt-to-equity ratio of 25.5% is well below the industry average of 86%.
It’s a solid story and I expect it to continue. ANAL-ysts expect revenues of $3.1 billion in 2012 with EPS of $4.57. I guess the ANAL-ysts don’t subscribe to www.mrmarketishuge.com. Because if they did, they’d know that 2012 revenues will be $4.64. Ok, they were pretty close on earnings but that’s good enough for me. If you take my $4.64 and multiply by the PE of 29, you get a share price of $4.64 x 29 = $134.56.
As they say in the Bud Lite commercial – “Here we go!”
Don’t trust Bud-Lite..here’s what the boss man said. Come to Papa!
Chairman and CEO Joseph C. Papa concluded, "The strength of our business model was evident this quarter, and as we look forward to the end of fiscal 2011, we expect this to continue. Reported fiscal 2011 earnings from continuing operations are now expected to be between $3.43 and $3.53 per share. We now expect fiscal 2011 adjusted diluted earnings from continuing operations to be between $3.90 and $4.00 per share, up from our previously announced $3.75-$3.90 per share. This new range implies a year-over-year growth rate of adjusted earnings from continuing operations of 29% to 32% over fiscal 2010 adjusted EPS."
Mr. Papa continued, "Our retailers and consumers continue to realize the value proposition of Perrigo's high quality, affordable healthcare products and we look forward to increasing our production volumes further to meet their growing demand."
Ok Papi…show me some money. Bring me your finest meats and cheeses.
I am HUGE!!
$$$MR. MARKET$$$
__________________
=============================
I am HUGE! Bring me your finest meats and cheeses.
- $$$MR. MARKET$$$
Today I sold PRGO at 111.66. That’s a 19% gain over my purchase price of 93.70. Did you do that? YOU? YOU??? YOU???????
Over the same period, the S&P 500 did nothing…..NAHTHING…..a 0.0% return. What would you do, would you rather make 19% or would you rather make NAHTHING. $$$MR. MARKET$$$ is like a salmon swimming against the tide. If the stock market goes down, $$$MR. MARKET$$$ makes money. If the stock market goes up, $$$MR. MARKET$$$ makes piles of money…ha ha ha it’s so easy I am laughing so hard my tummy hurts. I need Tums.
Bring me your finest meats and cheeses. If you want more picks, you better tell me now or else no more picks for you!
$$$MR. MARKET$$$
================================================== ===================================
07-26-2011, 10:24 PM
mrmarket
Administrator
Join Date: Sep 2003
Posts: 4,076
PRGO ==> The Sweltering Winner!
When $$$MR. MARKET$$$ was a first time home owner in Old Bridge, NJ (right off of Exit 9) his kitchen and family had a nice shiny linoleum floor. Now this floor didn’t stay shiny very long and pretty soon $$$MR. MARKET$$$’s spawn were peeling up the corners and eating them for dessert (they must have thought it was lebne). Anyway, the order of the day was to get hardwood floors.
Now $$$MR. MARKET$$$ has never been known to be very extravagant when it came to home furnishings, so when he saw the price of wood floors, he opted for a less expensive alternative. That’s right, $$$MR. MARKET$$$ had Pergo fake wood floors put in.
Now truth be told, these floors looked pretty snappy, but after a few body slams and elbow drops off of the top rope, the floor got kind of, how do you say, bubbly? Never mind all that. Not soon after, $$$MR. MARKET$$$ sold the house and the new owner put in a swimming pool in the back yard. So everyone was happy.
The only reason I ever thought of Pergo again, was because my newest stock pick is Perrigo Company (PRGO). PRGO has nothing to do with Pergo the floor. Instead, it makes and sells so many different products that its stock price is going to go through the ceiling. That’s why I like it.
In 1887 Luther Perrigo, the proprietor of a general store and apple-drying business, had the idea to package and distribute patented medicines and household items for country stores. Located in Allegan, Michigan, the L. Perrigo Company enjoyed steady growth, and by the early 1920s as many as 50 Perrigo salesmen were calling on rural stores throughout the Midwest. The company then developed the “private label” concept as a way to build customer loyalty. For no additional cost, Perrigo offered to imprint the individual store’s name on the labels for epsom salts, sweet oil, bay rum and dozens of other “wets and drys” stocked in general stores of that era.
In the mid-1930s, Perrigo landed its first, large private-label customer, the K & W group, a buying organization that grew into the People’s Drug Store chain. At about the same time, Perrigo began its manufacturing operation, laying a strong foundation for rapid future growth.
Over the past 25 years national and regional supermarket, drug store and mass merchandise retail chains experienced tremendous growth. As retailers grew, so did their presence in the store-brand arena, as they strove to build customer loyalty with products sold under their own company labels, just as Luther Perrigo surmised they would. Perrigo grew as well, acquiring several businesses throughout the world to augment its position in the store-brand industry. Perrigo is now a leader in producing and distributing store-brand versions of popular over-the-counter medications sold at Wal-Mart, Target, CVS, Walgreen and other major retailers.
The company expanded its product portfolio to include generic prescription pharmaceuticals, creating a more diversified health-care company. To expedite the growth of the generics business, in March 2005 Perrigo acquired Agis Industries, adding their products, pipeline and proprietary technologies to our consumer health-care business.
On a pro forma basis, sales for Agis and Perrigo exceed $1.3 billion. The combined company employs 7,000 people worldwide, with manufacturing and logistics facilities in the United States, Israel, United Kingdom, Mexico, Germany and China. And that, my friends, is how you make an idea fly.
Today I bought PRGO at 93.70 I will sell it in 4 – 6 weeks at 107.94. Here’s why I like PRGO:
First of all, I like the chart.
Now this chart may be a little rickety when compared to other great $$$MR. MARKET$$$ winners such as FOSL. However, it’s important to keep in mind the engine of earnings growth that this company has become. Because of this, PRGO stock is up 70% in the last 12 months, and I expect this trend to continue. This ain’t no startup. Perrigo is one of the 5 largest Pharmaceutical companies in the world.
First of all, look at its revenue growth:
YEAR Revenue, Millions $
2001 753
2002 826
2003 827
2004 898
2005 1024
2006 1367
2007 1447
2008 1822
2009 2007
2010 2269
That’s right…for the last 10 years, this company has grown its revenue successively each and every year. That’s the sign of a successful company. Now who in their right mind would ever suggest that this trend would not continue? In the most recent quarter, revenues are up 22% year on year. EPS are up 41% year on year. Both Gross Margin and Operating Margin are on the rise, meaning that while revenues grow they are selling more of the higher margin items. PRGO has a 3 year CAGR revenue of 18% and 3 year income CAGR of 47%.
Perrigo Company, through its subsidiaries, develops, manufactures, and distributes over-the-counter (OTC) and generic prescription (Rx) pharmaceuticals, nutritional products, infant formulas, active pharmaceutical ingredients (API), and pharmaceutical and medical diagnostic products worldwide. It operates in four segments: Consumer Healthcare, Nutritionals, Rx Pharmaceuticals, and API. The Consumer Healthcare segment offers OTC pharmaceutical products, including analgesics, smoking cessation, gastrointestinal, cough/cold/allergy/sinus, first aid, and feminine hygiene products. The Nutritionals segment provides infant formula products, infant and toddler foods, oral electrolyte solution products, and vitamin, mineral, and dietary supplement products. The Rx Pharmaceuticals segment manufactures and markets a portfolio of generic prescription drug products, including creams, ointments, lotions, gels, shampoos, foams, suppositories, sprays, liquids, suspensions, and solutions, as well as nasal sprays, oral liquids, and transdermal products. The API segment develops, manufactures, and markets API used by the generic drug industry and branded pharmaceutical companies. Perrigo Company also manufactures and markets branded prescription drugs; and imports pharmaceutical, diagnostics, and other medical products. The company has collaborative agreements with Medicis Pharmaceutical Corporation, Medimetriks Pharmaceuticals, and Cobrek Pharmaceuticals. Its customers primarily include retail drug companies, supermarket, mass merchandise chains, chain drug stores, wholesalers, distributors, hospital systems, and group purchasing organizations.
Before you lose the forest through the trees, I think it’s important to focus on the generic prescription component. Over the last decade or more, American consumers have shown a willingness to substitute store-brand products for the branded originals. Perrigo’s largest division is its Consumer Health Care division which represents over 60% of the revenues. Here’s where it gets REALLY interesting. There are over $10 Billion in potential branded sales from RX to Over the Counter switches in the next 5 years. In FY 2011 alone, we’re going to see generic versions of Allegra, Zantac, Mucinex, Aleve, and some nicotine coated gums.
Speaking of Nicotine gum…here’s the beauty of in store brands. If you sell Nicorette gum on your shelf, you can sell a box for $70 but its cost is $57. So your margin is only 13 bucks or 20% profit. If you sell CVS brand gum, the retail price is only $53 but its cost is only $23.50, That means your profit per box ($29.50 or 56%) is better than your name brand and the consumer saves 26%. So the store makes MORE money on the LESS EXPENSIVE items. Consumer is happy…store is happy. Now where do you think growth is going to come from in these tough times…hmmmmm? As Rx medicine switches to OTC medicine, this will continue to feed this machine.
Non-prescription pharmacy products like painkillers and cough and cold medicines are Perrigo's biggest lines. The company sells versions of such popular brand names as Advil, Robitussin, Sudafed and Tums.
Other growth drivers are the brand share growth and also over 50 new products will be launched this year. Got to take a poo and want some Miralax? With 5 new OTC approvals, Perrigo will have 90% of the “Clear Lax” market. Can you smell the chemistry here? Store brand MiraLax has increased to 42% penetration in the first year of product launch. Yeah…go Clear Lax..make you go go go!
Lots more to come. We got Nexium, Protonix and Prevacid coming up. That’s $15 billion right there in sales. I spent $500 on a bottle of Prevacid last time. It’s so expensive, now I only take it before I go to Vegas. I can’t wait for the generic junk to come out. Store brands are going nuts as makers of prescription products seek and win FDA approval to sell them over the counter. Once the manufacturer of a patented drug wins such approval, Perrigo is quick to market with its own store-brand version.
Other products ready for switch include Statins ($17 billion), Asthma ($5 billion), and Erectile Dysfunction ($3 billion)…yea..love that one..time to give good wood on the cheap. Perrigo will set up and register generic OTCs for reimbursement through public and private health plans. They will then leverage their portfolio and pipeline of OTC products for generic substitution when appropriate. In fact, all Perrigo OTC’s are registered for reimbursement.
They have been growing by acquisition as well. Today Perrigo bought Paddock ($200 million of sales) and said the acquisition of Paddock would bolster its portfolio of specialty generic drugs, or drugs that require special handling. Specialty drugs are one of the fastest-growing parts of the pharmaceutical market.
It all flows through to the earnings.
Third Quarter Results
Net sales from continuing operations for the third quarter of fiscal 2011 were approximately $692 million, an increase of 29% over fiscal 2010. The increase was driven primarily by the acquisitions of PBM Holdings, Inc. (PBM) and Orion Laboratories Pty Ltd. (Orion), as well as $44 million in new product sales. Reported income from continuing operations was approximately $92 million, or $0.98 per share, a strong increase over $62 million, or $0.66 per share, a year ago. Excluding charges as outlined in Table I at the end of this release, third quarter fiscal 2011 adjusted income from continuing operations was $100 million, or $1.07 per share.
Nine Months Results
Net sales from continuing operations for the first nine months of fiscal 2011 were $2,050 million, an increase of 24% over fiscal 2010. The increase was driven primarily by strong results in the Rx and Nutritionals segments and included consolidated new product sales of approximately $156 million. Reported gross profit was approximately $703 million, up 28% over last year, and the reported gross margin was 34.3%, up from 33.3% last year. Reported operating margin increased 220 basis points to 17.9%, and adjusted operating margin increased 140 basis points to 19.7%. Reported income from continuing operations was $255 million, an increase of 45%. Adjusted income from continuing operations was $280 million, or an increase of 34%.
In terms of the balance sheet, Perrigo has $1.381 billion in current assets balanced against $907 million in current liabilities. This generates a current ratio of 1.52. Generally current ratios of 1.5 or higher suggest a healthy, at least short-term, financial health. Perrigo has total assets of $3.09 billion compared to total liabilities of $2.01 billion. Although Perrigo’s total debt did increase from last year on some of its acquisitions, its cash and equivalents jumping $182 million to $498 million. The company’s debt-to-equity ratio of 25.5% is well below the industry average of 86%.
It’s a solid story and I expect it to continue. ANAL-ysts expect revenues of $3.1 billion in 2012 with EPS of $4.57. I guess the ANAL-ysts don’t subscribe to www.mrmarketishuge.com. Because if they did, they’d know that 2012 revenues will be $4.64. Ok, they were pretty close on earnings but that’s good enough for me. If you take my $4.64 and multiply by the PE of 29, you get a share price of $4.64 x 29 = $134.56.
As they say in the Bud Lite commercial – “Here we go!”
Don’t trust Bud-Lite..here’s what the boss man said. Come to Papa!
Chairman and CEO Joseph C. Papa concluded, "The strength of our business model was evident this quarter, and as we look forward to the end of fiscal 2011, we expect this to continue. Reported fiscal 2011 earnings from continuing operations are now expected to be between $3.43 and $3.53 per share. We now expect fiscal 2011 adjusted diluted earnings from continuing operations to be between $3.90 and $4.00 per share, up from our previously announced $3.75-$3.90 per share. This new range implies a year-over-year growth rate of adjusted earnings from continuing operations of 29% to 32% over fiscal 2010 adjusted EPS."
Mr. Papa continued, "Our retailers and consumers continue to realize the value proposition of Perrigo's high quality, affordable healthcare products and we look forward to increasing our production volumes further to meet their growing demand."
Ok Papi…show me some money. Bring me your finest meats and cheeses.
I am HUGE!!
$$$MR. MARKET$$$
__________________
=============================
I am HUGE! Bring me your finest meats and cheeses.
- $$$MR. MARKET$$$
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