Sentiment in AmerisourceBergen Corp.(NYSE:ABC) is getting pretty pessimistic once more and value investors are wondering whether we may have a possible value play on the cards here. The stock actually reached $95 a share prior to the announcement of its third quarter earnings but then sank to sub $80 prices in the aftermath of a mixed report. The pharmaceutical distributor is definitely struggling with its pricing at present both on the buy side and sell side. However the clear monopoly among the big 3 distributors in the US has to eventually become a tailwind for AmerisourceBergen once more. Why? Because new competitors would feel that the low margins would not be worth the extensive infrastructure investment which would be needed to compete in this sector.
In saying this, there have been murmurs that Amazon (NASDAQ:AMZN) will one day enter this space. In fact, the tech giant is already running a pilot drug scheme in Japan so the US $300 billion market may very well be on the agenda.
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