Cardinal Health Inc (CAH), a health care services company providing products and services to health care providers, is coming through a challenging couple of years with opportunities for cash flow deployment, the re-establishment of their medical side of business as well as a positive bias toward dividends, says Ross Muken, Senior Managing Director at ISI.
“We…like Cardinal Health (CAH) in the service complex — great pharma distributor, pharma wholesaler. They had a challenging 2012, 2013 through the loss of Express Scripts and Walgreens. They’re now compounding against that,” Muken said.
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Muken expects CAH to deploy a significant amount of cash flow as they re-establish their medical side of the business, and sees other positive characteristics of the company that enhance its value.
“We think stocks are quite inexpensive. You’ve got a great positive bias toward dividends, and there is a lot more, we think, that can come on the M&A side that continues to enhance the overall mix,” Muken said.
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