If You Invested $1000 in AmerisourceBergen a Decade Ago, This is How Much It'd Be Worth Now
How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in AmerisourceBergen (ABC) ten years ago? It may not have been easy to hold on to ABC for all that time, but if you did, how much would your investment be worth today?
AmerisourceBergen's Business In-Depth
With that in mind, let's take a look at AmerisourceBergen's main business drivers.
Chesterbrook, PA-based AmerisourceBergen is one of the world’s largest pharmaceutical services companies, which focuses on providing drug distribution and related services to reduce health care costs and improve patient outcomes.
The company reports through two segments – Pharmaceutical Distribution and Other. The Pharmaceutical Distribution business includes the operations of AmerisourceBergen Drug Corporation (ABDC) and AmerisourceBergen Specialty Group (ABSG). The segment services healthcare providers in the pharmaceutical supply channel. The ABSG division provides pharmaceutical distribution and other services mainly to physicians, who specialize in a variety of diseases, especially oncology, and to other health care providers, including dialysis clinics. The ABDC division is involved in the distribution of branded pharma drugs and generic drugs, over-the-counter healthcare products, home healthcare supplies and equipment and related services to a range of healthcare providers.
The “Other” segment consists of AmerisourceBergen Consulting Services (ABCS), World Courier and MWI Veterinary Supply. The ABCS business provides commercialization support services to pharmaceutical and biotech manufacturers.
Segment Realignment Update
It is worth mentioning that AmerisourceBergen made a strategic evaluation of its reporting structure in order to represent its expanded international presence because of the June 2021 buyout of Alliance Healthcare. Consequently, starting from the first quarter of fiscal 2022, the company has realigned its reporting structure under two reportable segments — U.S. Healthcare Solutions and International Healthcare Solutions.
FY21 at a Glance
Total revenue in fiscal 2021 came in at $213.99 billion. The Pharmaceutical Distribution Services contributed to 92.6% of net revenues in fiscal 2021. The Other segment accounted for 7.4% of net revenues.
Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in AmerisourceBergen ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in February 2012 would be worth $3,819.57, or a 281.96% gain, as of February 23, 2022. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 217.07% and the price of gold increased 2.58% over the same time frame in comparison.
Looking ahead, analysts are expecting more upside for ABC.
AmerisourceBergen exited the fiscal first quarter on a mixed note, wherein earnings missed the consensus mark but earnings beat the same. The company witnessed robust segmental performance in the quarter under review. Expansion at both gross and operating margins is positive. The company is well-positioned to deliver long-term sustainable growth on the back of its diverse and inclusive teams and investments in people and culture. A strong fiscal 2022 outlook instills optimism in the stock. A strong solvency position is an added plus. Over the past year, AmerisourceBergen outperformed its industry. However, the company continues to face headwinds like conversion of branded drugs and lower price generics. Cut-throat competition in the MedTech space and economic stagnation amid the pandemic remain woes.
The stock is up 7.25% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 6 higher, for fiscal 2022. The consensus estimate has moved up as well.
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