Last time I wrote about Beximco Pharma I told that I sold a bit of my position recently, and today I have the same disclosure to make. It’s a bit unfortunate because the company keeps reporting great numbers, and the latest results are not different. The stock jumped 17% higher today in London, and because of that the discount between the shares that trade in Dhaka and London keeps shrinking. When I entered my position in 2014 the discount was a bit above 60%. In November it was still at 40%, at the end of the year roughly 35% and now it’s just 25%. That is making the shares of course less attractive than before, but it’s still a nice discount.
Beximco Pharma reported 13.4% revenue growth while operating profit grew with 18.2% in 2016. By buying the shares in London you are currently just paying a 13.3x P/E-ratio for the shares compared to the 17.8x P/E-ratio domestic investors are willing to pay in Dhaka. I think both numbers are pretty cheap for this kind of growth. Now that my Beximco position is not oversized anymore I will hang on to my current shares at the current discount.
Author is long Beximco Pharma