Wednesday, December 20, 2006

Australian Pharmaceutical Industries Limited loses $17.3 Million

Australian Pharmaceutical Industries Limited (ASX:API) had a terrible year. There were more than its share of mishaps. It has reported an interim net loss of $A17.3 million for the six months ended 31 October. The group has a new CEO, Stephen Roche, who is optimistic about its future. He is predicting a much better performance in the current half-year. Since this release the shares have dropped 1% to $2.27.

Is this a turnaround story ? Can it come back now that it has a new CEO ?

Personally I steer clear of these companies. A lot of people think fundamental analysis is about buying the cheap stocks which are going poorly and then waiting for the turnoaround to happen. I take a different view and that is that some good companies come cheap and when they do you want to jump on them. A company that is making a net loss of 17.3 million is not a good company. You need a company that is making a proifit if you want to see any type of captial gain or dividend payout.

Good Luck.

No comments: