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  • Short AmerisourceBergen: There's No Easy Cure For What Ails This Drug Wholesaler
       • Fri, Mar. 21 CAH, MCK, ABC 12 Comments


    • Gross margin at AmerisourceBergen (ABC) continues on a downward spiral that was in existence well before its partnership with Walgreens/Alliance Boots;
    • ABC has made some accounting decisions that attempt to shore up its income statement—counting a gain as an offset to COGS and reducing its Allowance for Doubtful Accounts;
    • ABC’s cash inflows are now very dependent upon an accounts receivable securitization program, which would also benefit from a lower Allowance for Doubtful Accounts;
    • However, over the next 6 to 9 months, fundamentals will make it harder to mask deteriorating margins and cash flows—target $45 per share.