A: Thanks for the question – although I am not sure whether it is “should I buy more Sigma Pharmaceutical (SIP)?”, or “do you prefer other health stocks?”

I don’t have a strong view about SIP. They have rallied fairly strongly over the last 12 months  – however, the outlook is somewhat clouded and there is minimal earnings or sales growth occurring. The brokers are also pretty neutral – according to FN Arena, the consensus target price of $0.68 is below their current price, sentiment is mixed at 0.0 (scale -1.0 to +1.0), and for FY 15, SIP is trading on a forecast PE of 14.4 and dividend yield of 5.1%.

SIP is currently undertaking an on-market buy back which is probably providing some price support – they are about 2/3 of the way through.

Personally, I prefer other stocks in this sector – Ramsay, CSL or Resmed.