Monday, April 8, 2013

Share Price Alert: Fisher & Paykel Healthcare Ltd 5

Fisher & Paykel Healthcare Ltd [FPH.NZX] is a stock that I haven't written much about for about 1 year apart from the stock picks series.

I re-mention it again because of a question I was asked 2 days ago. Is there a stock I would still buy to get a good return and that would provide capital growth.

My answer? Fisher & Paykel.

It is a stock that is still WAY under-priced and I last picked it at its all-time low of $1.85  in August of 2012 and it remains a bargain (keep in mind I have 20000, last bought in January 2012 )which I personally would buy all the way up to 3 dollars even. 

FPH is a well managed company with a good history of increasing profits and revenue based on their manufacture and sale of high end, well sought after medical products that have high margins and a reputation for cutting edge technology which more often than not beats its competition.

The only problem, if there is one, is that much of their business is done in US dollars and due to a weak US buck profits repatriated back to head office in New Zealand have been mostly static over the last 4 years and that will grow marginally in 2013.

The currency affect will always be there so investors just have to deal with this. The company have forward hedging in place this year any weakness expect a currency gain .

Revenue and profits have grown over the years and their new products, especially their sleep apnea range has a good foot in the door in an ever increasing American market with overweight patients knocking on their doctors doors for help. This will clearly increase revenues in the near and long-term future.

The share price has been trading in a tight range over the last 6 weeks between $2.50-$2.70 but has traded as low as $2.35 in February then briefly trading at $2.60 in December then all the way down to $1.85 in the aforementioned all-time low.

You maybe lucky and get it around $2.58 but I am picking a rise come this reporting season, (announced late May 2013), announced by the company itself  and tip a further rise.

I would buy now.

Fisher & Paykel Healthcare

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Discuss FPH @ Share Investor Forum
Download FPH Company Reports

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Recommended Amazon Reading

The Intelligent Investor: The Definitive Book on Value Investing. A    Book of Practical Counsel (Revised Edition)
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
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Shareinvestor 2013