It’s seems fitting to me to celebrate a little grace (in this case, a LOT of grace) during the holiday season.
Abbott Labs (ABT)
No stranger to investors in our community, Abbott Labs (ABT) is a global, broad-based health care company devoted to discovering new medicines, new technologies and new ways to manage health. Products span the continuum of care, from nutritional products and laboratory diagnostics through medical devices and pharmaceutical therapies. The comprehensive line of products encircles life itself – addressing important health needs from infancy to the golden years. ABT is recognized as a global enterprise with the ability to serve customers around the world.
Throughout its 120+ year history, Abbott people have been driven by a constant goal: to advance medical science to help people live healthier lives. It’s part of their heritage. Today, approximately 90,000 employees around the world share the passion for “Turning Science Into Caring.” It’s a commitment to focusing on what matters most: life and the potential it holds when we are feeling our best.
Stock Study and Equity Analysis Guide
Q: Why do we do stock studies?
A: To build a vision of what a company (stock) might be worth in the future.
That vision includes two core components: a five-year earnings forecast … and an estimate of the average value (projected P/E ratio) that we believe investors will be willing to pay — based on our assumptions, judgments and careful considerations.
Any stock study is basically a fill-in-the-blanks quiz. If (company name) can grow sales at ____%, achieve a profitability of ___% for net margin, and if a reasonable price-to-earnings ratio (P/E, essentially the foundation of the value of any company) would be _____x … then the projected annual return (PAR) could reasonably be: _______%.
In the case of ABT, our answers are (1) 9% … (2) 18% … and (3) 15x … for a result of 17-18% projected returns.
As I mentioned before, we’ve featured Abbott Labs frequently over the last several months. Recently, I covered it as I discussed some screening results and shared the study results behind the answers selected for the quiz above. You can view a video (including powerpoint discussion with audio) here:
Our next Round Table session is scheduled for [12/29/2012 at 11 AM ET] … with more details and information here:
We look forward to discovering a little more grace and formidable long-term investments like Abbott Labs during our Round Table session.