A Niche Business Should Have Financials Like This! - Chart Of The Day 21 September 2018 - Equitymaster

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A Niche Business Should Have Financials Like This!
Sep 21, 2018

Talking about the pharma companies, I have noticed something interesting. Every pharma company claims to do something special but their financials are seldom in sync.

Every pharma company in India has developed drugs that it specialises in. In fact, they call it their niche.

Just to give you an example, the company we met in south India earlier this week claimed to be one of the few manufacturers of a certain drug.

We really liked the story. But if you were to look at the long-term financials, they don't reflect any niche attributes. There was no sync with the story and financials. Hence, we decided to look at another pharma company for Smart Money Secrets.

I believe it is very important that financials should reflect the so called niche or competitive advantage or moat the company claims it has.

If it fails to deliver on the financials, then its moat is lame.

Look at today's chart. This month's Smart Money Secrets recommendation fares very well.

I want companies to display this kind of performance for years, if not decades. Only then will I believe the companies command moats that they claim to have.

Data Source: Ace Equity

This Chart Of The Day was published in The 5 Minute WrapUp - My First Pharma Stock Recommendation!

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