Why Sigma Healthcare Ltd shares are on the rise this week

Sigma Healthcare Ltd (ASX: SIG) finished yesterday up 4% to $0.81c but is down 39% in a year.  

Sigma Healthcare has a pharmaceutical network as well as being a wholesaler and distributor of pharmaceutical products. The share price has been weak due to earnings being below expectations for the 2017/18 financial year.

The company said the disappointing profit was due to a combination of “softer consumer retail spending during the year, the loss of a large customer group, the mediation process with our largest customer in Chemist Warehouse, and the ongoing impact of regulatory issues”.  

The forward price-to-earnings ratio is 14x, while the current dividend yield is 6.5%. 

Ramsay Health Care Limited  (ASX: RHC), which is in the same sector, also saw a 4% fall to $62.18. News that the CEO sold down 75,000 shares, which he says is for for tax reasons, may mean that he lacks some confidence in his own company. 

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It's been a nail-biter of a reporting season here in the first half of 2018.

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Motley Fool contributor Rosemary Steinfort has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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