A good result - tell me another story Hoop
An extremely well managed company - how can you say that Snoopy as CAH carry on the long tradition of value destruction.
A better result than the past few quarters. Yes but over the last 12 months CAH have made $113 million (of which $40 million is a tax credit).
A return on capital invested of only 3.4%. CAH cost of capital is 14.6% (PWC). Average capital employed has been nearly $6.7 billion - sort of suggests that they are about $750 million short of being economically profitable, ie value destruction. The market is expecting this too carry on into the future - to the tune of nearly $3 billion
Maybe this is why the market has not reacted to this 'good' result. Still trading at a p/e of 30+ on trailing earnings. Take into account that (for relative comparisons to other companies)CAH are still not paying tax the current price is nothing too get too enthused over.
But as soon as JB Were and others raise their target price and circulate to their clients the CAH share price will have a bit of a burst over the next few weeks.
Snoopy - bit puzzled why you have CAH. Doesn't seem to fit with either your income strategy or your growth strategy. And Warren wouldn't be too impressed either.
See IRG research reports
