Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Four Reasons Why Investors Are Wrong on IMS Health


Truly great opportunities in stocks that everyone hates and no one wants to own.

The word contrarian is often overused in investing, I have yet to meet an investor who bragged about being a crowd follower; therefore, everyone is a contrarian.

Contrarian investing is very difficult, as it often requires one to be on the lonely side of the ledger, watching as truly great opportunities are presented in stocks that everyone hates and no one wants to own.

IMS Health (RX) collects prescription data from transactions at pharmacies all over the world. It aggregates, analyzes, combines it with other databases, and sells it to pharmaceutical companies.

For instance, from a script filled at pharmacy in combination with other sources, RX would collect drug, dosage, doctor name, doctor's specialty, zip code, illness, and so on. (Patients' names are anonymized before RX receives them.) Pharmaceutical companies use this data to gain market intelligence on what's taking place in the industry globally and to determine compensation for their sales force.

RX collects data from over 100,000 locations, globally (key word: globally), which -- together with its tremendous intellectual property developed over the last 50 years -- are sources of significant competitive advantage.

RX drove most of its competitors out of business, and new ones are hesitant to enter as they'd likely suffer the fate of RX's former competitors. Investors don't like RX stock -- to put it mildly.

Here are some of the reasons why -- and why they're wrong:

1. Political uncertainty in the healthcare industry
Even if US healthcare turns into Obama social care, RX is well equipped to operate in this environment. Almost two-thirds of RX's revenue comes from outside of the US, a lot of it in the countries where health care is run by government. As a side note, I do believe that, due to significant budget deficits, Obama will fail to achieve his ambitious health care plan in the US.
< Previous
Position in RX

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos