While the market penalized Japanese drug store chain operator Tsuruha (TSE:3391) last year for what appeared to be greater pricing pressure in its dispensing business, our view was that a rise in pricing pressure would simply accelerate a consolidation in the drugstore industry. We believed that Tsuruha was well-placed to benefit from the consolidation trend given its strong operational and acquisitive track record. That thesis has remained intact, and the market has subsequently rewarded Tsuruha for the synergies it has been able to extract from its acquired assets.
From Mawer Canadian Equity Fund (Trades, Portfolio)s second quarter 2017 investment newsletter.
