Not fully recovered
Aspen tried to calm market fears with a voluntary announcement but only increased the jitters. The update mentioned debt levels, currency influence, the infant formula sale and projected organic growth. Growth is expected to be between “1% and 4% in its Commercial Pharmaceuticals business for the 2019 financial year” and this raises two issues. It’s very mature organic growth, considering it’s about threequarters of Aspen’s business. But what really worries the market is management’s lack of HEPS guidance. The stock fell further to under R170. A price-to-earnings ratio (P/E) of 12 times looks cheap, but I continue to stay away.