API – Australian Pharmaceutical Industries Limited

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I see a cup and handle pattern forming, watch for the handle breakout on volume (~ 4M shares).

Price Target of 77-78 cent using –
• Target: The projected advance after breakout can be estimated by measuring the distance from the right peak of the cup to the bottom of the cup.

API is Insider Trader’s pick of the week and has these comments

– 5 Directors have been buying recently
– Brokers re finally increasing their recommendations
– Buyer demand and smart money has been increasing substantially
– It’s also currently trading at below its stated net tangible assets.

DYOR
I hold API

 

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Hello Fool,

(not sure that I like your handle but each to their own – you may not like my avatar)

The chart below also shows a Cup & Handle (diagram a bit different but the target similar).

Daily chart: Volume still dropping and still close to support – may just bounce off support on any weakness monday

 

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Hey Ectoplasm,

Thanks for a proper chart, my skills in paint are… well see above lol. Good to see we have a similar target, that’s what matters in the end. I guess now we just have to wait and see what happen when the traders return from holiday.

 

Joined
Feb 19, 2016
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Well. I was wrong. Thought this would be a good buy in the current economic climate. Another company cancelling the dividend for no good reason other than the BS ‘prudent capital management’ excuse. Director and executive pay should be cut before the dividend is cut. It took to slide 12 in the presentation to say the dividend was cancelled.

Sold, and I think this will be well below $1 in the coming months. API board and directors obviously feel something bad is coming and if they feel they need to conserve cash. Their earnings were average – and the period reporting ended in February – before all the corona virus restrictions took place. Not looking good. The $60 million owing to the skincare clinics is going to kill API. They should cut their losses and divest this garbage now. The business is not making a penny and will probably be the last thing the government let’s re-open. Hope they had business interruption insurances.

The only thing looking good is net debt. But sentiment is now shot for API. Should be a good opportunity to get in at significantly lower prices.

 

Joined
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WES must have worked something out with SOL (or vv)

Highlights
• Wesfarmers (ASX:WES) has submitted a non-binding, indicative offer to the Board of Australian Pharmaceutical Industries Limited (API) to acquire 100 per cent of API’s shares outstanding for $1.38 cash per share by way of a scheme of arrangement.
• Proposal price represents a 21 per cent premium to API’s last close price of $1.145 per share.
• API’s major shareholder Washington H. Soul Pattinson and Company Limited (SOL), which owns 19.3 per cent of API’s shares outstanding, has agreed to vote in favour of the Proposal and has granted a call option in respect of its API shares in favour of Wesfarmers.
• API operates a portfolio of complementary wholesale and retail businesses in the growing health, wellbeing and beauty sector.
• Wesfarmers is well-positioned to bring capital and unique capabilities to support investment that will strengthen the competitive position of API and its community pharmacy partners.

 

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This may well be shaping up as the Battle of the Conglomerates.

SOL couldn’t make a go of it. Am pretty sure they had a bigger holding before and have been selling down. So, I wonder what WES thinks it can bring? Some PPE from Blackwoods? Some insights from Catch?

And the elephant in the room is the imminent listing of Chemist Warehouse, the cost cutters par excellence

 

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