On Dec 18, 2015, we issued an updated research report on New Jersey-based Phibro Animal Health Corporation PAHC– a leading global diversified animal health and mineral nutrition company. The company provides a broad range of products for food animals including poultry, swine, beef and dairy cattle and aquaculture.
Phibro ended the first quarter of fiscal 2016 on a positive note, with its bottom line comfortably beating the Zacks Consensus Estimate. Animal Health emerged as the key contributing business.
Management believes the company is well positioned in the fastest growing food animal species segment of the animal health market with significant presence in poultry and swine, which have been projected by Vetnosis to grow globally at compound annual rates of 5.9% and 5%, respectively, between 2014 and 2019.
Currently, the company is focused on expanding its footprint in the poultry, swine and cattle industries in both the domestic and international markets. The complementary nature of its animal health and mineral nutrition portfolio provides Phibro with unique cross-selling opportunities that can help it reach out to new customers or strengthen relationships with existing ones.
Moreover, the company has been expanding its share in many significant emerging markets for quite some time now. Of late, the company has ramped up penetration of some of its specialties in the dairy industry in the markets of Latin and South America. Currently, the company is expanding its dairy business in the markets of Australia, Brazil and Mexico. Further, the company’s distribution rights deal with MJ Biologics is expected to expand Phibro’s business in and out of North America.
On the flip side, the company witnessed tough currency challenges in its Animal Health segment, particularly in the dairy market, during the first quarter. Moreover, significant customer consolidations are expected to consequently ramp up the product pricing pressures that Phibro’s business faces. Phibro also faces competition from generic alternatives of some of its products that may weigh on its future financial health and operational performance.
Currently, Phibro carries a Zacks Rank #2 (Buy).
Key Picks in the Sector
Some other top-ranked medical products stocks are Capricor Therapeutics, Inc. CAPR, ICU Medical, Inc. ICUI and INSYS Therapeutics, Inc. INSY. All the three stocks hold a Zacks Rank #1 (Strong Buy).
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