logo
  Join        Login             Stock Quote

This Great-Performing Stock Just Got A Lot Better

 March 21, 2012 02:52 PM
 


Not long after I wrote about this big health care firm in December 2010, this stock began a nice hot streak. It's now up 31% in the past 12 months, compared with a 14% gain for the S&P 500 during the same time.

This is undoubtedly a great-performing stock.

But when I first suggested investing in this company, currently best known for its blockbuster rheumatoid arthritis drug Humira, I wasn't thinking much about what the stock might do in the next year or two. What I liked about it then, as I still do now, is how well it's likely to perform over a much longer time span.

So even though the stock's already up 31%, I think it has plenty more room to grow. In fact, I think it could easily rise another 50% during the next three to five years.

I'm talking about Abbott Laboratories (NYSE: ABT).

I referred to Abbott Labs as a health care company instead of a pharmaceutical manufacturer, because it's more than just a drug maker -- even though many investors probably only see it that way. Actually, Abbott Labs has so many irons in the fire that last November it announced it would split into two separate public companies  by the end of 2012. The plan is for the medical products segment to retain the Abbott Labs name, while the newly-created research-based pharmaceutical segment will be spun off to existing Abbott Labs shareholders. Both stocks will be publicly traded.

Analysts project the medical products division to have $23 billion in sales, while the newly formed drug company should initially have $18 billion in annual sales.

Abbott will be in charge of the company's medical devices, which include blood analyzers and other devices for use by diabetics, such as blood glucose meters. It will also make Abbott's line of nutritional products, such as PediaSure formula for children and Ensure nutritional drinks for older adults. It also has a new stent -- a device that holds open blocked coronary blood vessels. The stent is already available in Europe and Japan and should soon be approved for use in the United States.

The new pharmaceuticals company will own several patent-protected blockbuster drugs -- aside from Humira, which I mentioned earlier -- including the HIV/AIDS treatment Kaletra, and the cardiovascular medications Tricor and Trilipix. Together, these four medications currently account for roughly $11 billion in annual revenue (with Humira alone kicking in $8 billion). This accounts for almost 30% of the $39 billion in total revenue Abbott Labs generated in the past year.

Splitting into two companies makes good strategic sense.


Next Page >>12
iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageUnited States Steel Corporation (NYSE:X): Turning $50 Says Credit Suisse

United States Steel Corporation (NYSE:X) is rolling today; up nearly 2.5% thanks mostly to an upgrade from read on...

article imageDSW Inc. (DSW) Q2 Earnings Preview: Walking Past the Consensus

DSW Inc. (NYSE:DSW) will conduct a conference call to discuss its Second Quarter 2014 results on Tuesday, read on...

article imageBest Buy Co Inc. (BBY) Q2 Earnings Preview: Bulls Ignoring Warning Signs

Best Buy Co Inc. (NYSE:BBY) will announce its second quarter, fiscal-year 2015 before the market open on read on...

article imageXerox Corp. (XRX): An Insider’s $500,000 Insider Buy

Last week was a healthy week of insider buying as 194 companies reported purchase records. The number read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.