CSL - CSL Limited

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Tonche

All Australian
Apr 18, 2007
748
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Solid defensive option, has come down from $38+ as it has gone ex-div and as people move their funds to stocks which have taken more of a battering but with a $502m half year profit, this should stabilise soon.

Got in close to lows today and comfy holding for a while.
 

r dub 19

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May 14, 2006
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Big fan of CSL, it's been getting hammered of late some say the aus dollar is hurting the stock. I might get in if it goes any lower.
 

morgoth

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Big fan of CSL, it's been getting hammered of late some say the aus dollar is hurting the stock. I might get in if it goes any lower.

Ignore the $AUD crap. When the dollar went from 90 + cents to mid 60's did the CSL share price soar? Nope, instos will just use the '$USD' line to drive some business.

There is concern that various govts of the world, under extreme budget pressure will seek to cut back health care rebates etc. I am not sure whether this fear extends to CSL but it has certainly hurt SHL and PRY to name two.

Also a fan of CSL.
 

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Woof, what a wild ride this stock has gone.

On 5 September 2018 rose to $227.44 per share.

Today, 11 October 2018 dropped to just, just $185.50

Down nearly $42.00 per share in just over a month..

I bought @ $100.87 per share so still sticking with it.
 
Was tempted to finally buy it the last couple of days but held off, probably backfire but gonna wait a bit more with the current market jitters.

Pretty sure I will be heading to the AGM this Wednesday @ the Convention Centre. May get an idea of what, where, how they see the future.

I would think if you bought at around $185 they would get back to the $225+ price they achieved...at some time in the future. Their dividend is crap though.

For me, when people are selling is when I buy.
 
May 2, 2007
78,317
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Pretty sure I will be heading to the AGM this Wednesday @ the Convention Centre. May get an idea of what, where, how they see the future.

I would think if you bought at around $185 they would get back to the $225+ price they achieved...at some time in the future. Their dividend is crap though.

For me, when people are selling is when I buy.
As great as it is it's still been very expensive, some profits getting locked in.

I'm ridiculously overweight in mining/energy with stuff I have so far so have been meaning to balance it out for ages when things got cheaper. It's something I'm just gonna buy and probably just leave for years so even if you pay a bit more now it shouldn't matter much.
 
As great as it is it's still been very expensive, some profits getting locked in.

I'm ridiculously overweight in mining/energy with stuff I have so far so have been meaning to balance it out for ages when things got cheaper. It's something I'm just gonna buy and probably just leave for years so even if you pay a bit more now it shouldn't matter much.


I can offer 3 that I am tracking.

XRO = Xero the accounting software. Could have, should have bought in February this year for $31.76 (16.02.18) but had just started tracking. Now at $42.34. Has come back slightly along with market, but maybe a good one to look into.

NDQ = NASDEQ Again could have bought for $14.71 in Feb, now $17.35

ARQ = which is the old Melbourne IT merged. In Feb worth $3.30 now only $2.22. About 50% of the business has struck a problem affecting the share price, but the other half of the business doing well and continues to go ok. So, a few people got burned but this looks at this price to be worth considering.
 
May 2, 2007
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Bought more at $175 this morning, that's me done.
I can offer 3 that I am tracking.

XRO = Xero the accounting software. Could have, should have bought in February this year for $31.76 (16.02.18) but had just started tracking. Now at $42.34. Has come back slightly along with market, but maybe a good one to look into.

NDQ = NASDEQ Again could have bought for $14.71 in Feb, now $17.35

ARQ = which is the old Melbourne IT merged. In Feb worth $3.30 now only $2.22. About 50% of the business has struck a problem affecting the share price, but the other half of the business doing well and continues to go ok. So, a few people got burned but this looks at this price to be worth considering.
Buy any of these during this sell off? Tech stuff isn't really my thing tbh.
 
Bought more at $175 this morning, that's me done.

Buy any of these during this sell off? Tech stuff isn't really my thing tbh.

No

ARQ now $2.12 as at yesterday. Seems to be its level now

NDQ was $16.26 at close yesterday and Xero $39.43

Techs are not really my area so I went and bought (03.12.18) 500 Coles @ $11.49. Analysts were saying worth upto $13 a share so this price is pretty good.

COL have certainly dropped from their opening price. See how they go.
 

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Since the re-election of the Morrison government, the price has been, like the rest of the market, going steadily up again.

Was hovering around the $200 mark but now up to $219.46 on 20.06.19
 
May 2, 2007
78,317
97,547
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Yeah ultimate buy and hold stock. Funnily enough I've heard a few times out of the top (maybe 50?) companies on the ASX it the lowest % of retail investors as holders which is a bit odd. I guess maybe it's not really a well known 'brand'? I'd never heard of it before investing tbh. Also even though it's silly mum and dad investors might get put off by a stock that has such a high price is all I can think of.

edit - nearly bought COH when it pulled back into the 160s but bid fell just short, spewin.
 
$300 in striking distance!

Yes, and if it just started paying a decent dividend to reflect its share price, I for one would be a very happy chappy. Currently this stock to me is 182.63% profit on purchase price :).
 
Might get another chance to top up again at a reasonable level again the way this is going, even the best stuff will start getting sold off now.

Especially if THEY produce a cure for the COVID-19 virus!
 
May 2, 2007
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Investors have had to pay up for defensive stocks including healthcare stalwart CSL in recent times, but there's a solid supporting argument for this price premium.


While investors near-universally agree that CSL is a very high-quality business, when it comes to price, the agreement stops. Some claim the biotech company is too expensive; others say it's fairly valued, and some say the price is irrelevant.


Following another outstanding result yesterday, David Moberley from Paradice Investment Management believes investors focusing on the headline PE ratio are being misled by a quirk of accounting. Moberley believes his inflated figure effectively assigns a $30 billion-dollar negative value to the company's research and development (R&D) pipeline - which he thinks is a mistake.

How long have you held CSL?

CSL has been a long term holding our portfolios. Five or more years.

What attracted you to the company?

We think CSL is one of the highest quality businesses in the market. It is a global leader with scale advantages, an excellent management team, strong cashflows and a conservative balance sheet. The business has a significant runway of growth and can invest significant sums at very high returns.


It's the one of the few companies we’ve met that has a five- to 10-year planning cycle. That is why I think the management of the business is just phenomenal.

Whenever we think we’ve come up with a risk for the business and call the management team to talk about it, they’ll turn around and say, "Oh yeah, that's fine. We were thinking about this three years ago. We've actually already planned for it and this is our primary, secondary, and tertiary contingency plans." It is a phenomenal business.

What were the key points of the recent result?

Management delivered net profit after tax 6% ahead of its prior guidance on a constant currency basis. This was slightly ahead of where consensus estimates were. The result was strong across the board. Not only strong growth in their key bioscience division, but also in the flu vaccine business. Cash flow was strong, despite the company continuing to invest in future growth opportunities. The balance sheet is conservative with net debt-to-EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation) running at about one and a half times.


The result for the flu business highlighted what a stunning turnaround they have been able to manage in that business. CSL acquired this business off Novartis for close to its asset backing about five years ago. It paid $275 million for a business that had a book value of about a billion dollars, and had to sustain a few years of losses while they fixed it up. Including capital expenditure, all up they spent about $800 million. That business just delivered $332 million of EBITDA. The quality of the management team and the focus on return on invested capital (ROIC) is a little bit underappreciated in my view, and I think what they have been able to deliver with flu is phenomenal. It should be commended for that.

Were there any surprises in the results?

The big surprise in the result – and maybe this is why the stock was so strong on the day – was really around the outlook commentary. The stock had been sold off in the last three months leading into the result, and this is largely because of concerns around the supply of plasma and the collection centres in the US. These have been impacted by COVID-19 and have not had as many donations as they would have liked. This had meant that a lot of analysts had pulled back their forecasts for earnings expectations into '21.


Not only was FY20 strong, but the outlook commentary highlighted there'd been improvement in collections in July.

The company also outlined several options that could help mitigate some of these supply headwinds in the short term.


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Source: CSL company presentation

On top of that, management's guidance suggests they will be able to continue to deliver solid growth. Given how early this guidance has been put out, particularly with the uncertainty in the market, I think it was it taken as being quite conservative.

A lot of investors view CSL as being expensive. Could you explain why you see it as offering good value?

I think looking at headline PE for any company is overly simplistic. CSL spends around a billion dollars in R&D at the moment. Your bottom-line profit is being suppressed by a billion dollars of investment.


If you value that at the headline PE, you're saying that that R&D pipeline is worth roughly -$30 billion, which is clearly not the right way of thinking about it. Typically, CSL's been able to deliver very strong returns on that R&D, and the business runs a ROIC of around say mid 20%.

There's clearly a huge amount of value in that pipeline and I think the way we prefer to look at a business is to value each of the separate businesses individually and then we actually add on a component to that R&D pipeline. Given they are a dominant global leader with great scale advantages, strong growth outlook and an under-geared balance sheet, I can't see why the stock wouldn't continue to trade at a significant premium to the market.

Does CSL expense all its R&D in year one?

Yeah, that $922 million is what is being expensed through the P&L. If you're looking through a company's profit and loss statement and their earnings is being suppressed by the fact that they're investing a billion dollars to support future growth, then I think just valuing that part of the business at the headline multiple is obviously not the right way of doing it. For us, we prefer to look at that R&D pipeline separately.

Is there anything in that R&D pipeline that you’re particularly interested in?

Yes, there's a trial that they're running called CSL112. It's a potentially company changing drug. CSL112 is designed to remove cholesterol from plaques in the arteries which can lead to heart attacks or stroke events. The company is currently part way through a phase 3 trial, fully funded and expensed by themselves.


This product has a large market opportunity with a high unmet need. If the product is proven it could end up generating revenue up to a third of the current immunoglobulin business at very high margin. There is additional value created if this product is successful driven by the last litre economics of the fractionation process, that is to say, this product can be manufactured out of the existing raw materials driving margin up for the overall business.


I also think the company's work around COVID is interesting. CSL is collaborating with the University of Queensland for a vaccine candidate. It's also working on a number of treatment options for COVID, including the use of using antibodies from recovered patients.

https://www.livewiremarkets.com/wires/why-csl-is-cheaper-than-you-think
 

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