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This is a healthcare giant in the making

by , 23 April 2020
This is a healthcare giant in the making
During this lockdown period I've been unwilling to even go to the shops.

Not that I'm that scared of social contact - but I don't like dealing with road blocks. I've just heard too many stories of police brutality.

So, I've been looking at every way to reduce my need to drive about.

My butcher delivers my meat, a local farmer delivers fruits and veggies… And now, my wife's chronic medication is delivered straight to our door as well.

Before Covid-19 this might have been a tiny business - delivering medicine.

But now it's set to replace pharmacies altogether…

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How this business model could turn healthcare on its head
 
If you are registered with Pharmacy Direct, the company delivers your medication to your door. 
 
A chronic medication script can be sent to them, and you’ll receive monthly deliveries without any further admin, no need to remember to go to the pharmacy.
 
And the best, they deliver anywhere in SA, including remote areas. 
 
You get an SMS once your order is dispatched for delivery – and before you know it your medicine is delivered to your home.
 
So, this on its own is a great service. But it’s not ground breaking.
 
Here’s where it gets good though…
 
Pharmacy Direct is owned by a company called Afrocentric Investment Holdings.
 
Afrocentric owns Medscheme, Medscheme is the largest medical schemes administrator in South Africa.
 
In fact – you might not have heard of Medscheme yet but it administers more policies than Discovery Health does.
 
I’m pretty sure you’ve heard of Fedhealth…
 
Topmed…
 
Or GEMS…?
 
In all likelihood they provide you with your medical plan.
 
Well this penny stock I want to share with you today is the driving force behind these medical schemes. 
 
It sits with 39.55% of the market share compared to Discovery’s 38.8%.
 
That means it sits with a 3.7 million person customer base.
 
In addition to this Afrocentric bought another business called Activo Health.
 
Activo is an importer/manufacturer/distributor of medicines, and medical supplies. It specifically sells a lot of generic medicines to the state as well.
 
So, combine these facts and a great picture emerges.
 
Pharmacy Direct can buy medicines from Activo – and keep more profits in-house for Afrocentric.
 
It can also leverage off Medscheme’s customer base of 3.7 million. And can tie directly into the medical aids administered by Medscheme as well.
 
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Covid 19 sees demand for these services soar
 
Services like that of Pharmacy Direct have soared during the lockdown.
 
What’s more, Activo Health notes the company sold more multi-vitamins and immune boosters than ever. According to Afrocentric this division saw “unprecedented sales volumes for March, and expects these volumes to continue in April”.
 
What’s more the company holds three months’ worth of stock – so it’s been able to capitalise on massive ordering of its products from pharmacies.
 
Lastly, it also owns MMED, a business that sells surgical masks, protective gear and ventilators. I don’t think I need to explain to you how this business has seen demand increase…
 
The company also notes its hoarded medicine in February in anticipation of March price increases. This turned out to be a lucky coincidence now that everything is under lockdown and pricing is up…
 
This is definitely a giant in the making…
      
Here’s to unleashing real value,
Francois Joubert,
Editor, Red Hot Penny Shares  
 
PS. While Covid-19 has wreaked havoc in the markets, crypto’s quiet resurgence has not gone unnoticed, discover why here.


This is a healthcare giant in the making
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