Just got the following email:
Walgreens announced today that it is working with Sharps Compliance to launch the first ongoing, nationwide Safe Medication Disposal Program, a safe and environmentally responsible way to dispose of unused or expired medications. For the complete news release, please click the link below.
Problem with your statement is that you can't send controlled meds in the mail. But I still don't see many spending three bucks to mail meds to anywhere USA. Maybe mgmt can cheer you up tomorrow.
Here's a link to a reason why Walgreens might want to provide this. I see it more as a value added service. Specifically with controlled meds, fines don't seem out of the rhealm of possibility. That's not the reason for a pharmacy to offer this though. It's a way to complete the cycle. Hopefully people will fill scripts, and bring in old ones to be destroyed safely. Some people would probably choose them because they offer this service.
not for this deal.....for this specific type of waste, mgmt. says it is a $2bn addressable market, and they are correct, kind of.....it is most likely only a $1.3bn addressable market for SMED (again, for pharma, home needle, etc. waste, not just the Walgreen's deal)
Wait, are you seriously saying you expect $130 million in incremental sales for SMED from this deal? Whoa, I think that is very aggressive. I'm curious why you use the 17% FCF margin? Because the incinerator is operating way below capacity and any additional revenue should have a margin north of 50%. Even with the mailing costs for the meds.
Any fine is factually incorrect, especially a $3000 fine. It's not illegal to dump meds down the toilet or just dumping with the trash. I agree it's not the environmentally friendly thing to do. But let's be honest - there are no fines for consumers to dump meds in the garbage in most of this country. Even the crazy bulls on this site will agree with me on that. Or is everyone so levered to SMED and losing their shirts that you just let these facts get in the way?.
"however that this is going to be a very long-term build"
That's discounting any other deals the company may enter into in the next few years.
This one's a winner. After further thought I think that the new man at the top can't hurt either.
addressable market for this sort of waste is approximately $2.3bn....addressable market for SMED is probably only $1.3bn this number due to revenue sharing with sponsors.....even assuming a 10% penetration of a $1.3bn market over the next 10 years and a 17% free cash flow margin (consistent with industry sans interest expense of competitors) gets you to a $17/share dcf value at a 10% discount rate (inluding $20mm of existing revenue)......I agree with you that lots of folks will not use, but some will.....at $4 to $5 per share the cost of being wrong on this one is pretty darn small and the upside is 9x your money over 10 years....seems worthy of a small allocation as a long-term investment.....daytraders beware, however that this is going to be a very long-term build
[[[ Won't be prominently displayed in stores?
"...available at any Walgreens pharmacy counter"
Hmmm...sounds like it won't be too difficult to find especially when you have to pick up your drugs at the pharmacy counter ]]]