Sigma At Support

Despite a stronger performance, investors appear disappointed with Sigma's H1 results - bringing the stock to a key chart point.

The large red candle on the chart below tells a pretty clear story. Yesterday’s profit result was a bit of a miss as far as the market was concerned.

If Sigma is not a familiar name, Amcal probably is. Sigma is a wholesale pharmaceutical provider whose brands include Amcal. Its sales growth has been a bit run down recently. They could probably do with a bit of a tonic. Cuts to the government’s Pharmaceutical Benefits Scheme have been a headwind and total sales growth was 2.6% for the year

However, Sigma has a strong balance sheet. It’s had an ongoing buyback program and this will continue. It will buy back shares instead of paying a dividend this half. Further capital management is a possibility if Sigma can’t find businesses to buy with its spare cash. This potential for buy back support might put the trend line which currently intersects at around 76c on the radar for potential buyers of this stock.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles