Abbott Labs (ABT)

The past year has been trying. She doesn't believe there is no more growth or demand for their products. They lowered guidance and shares got punished hard. It remains a core holding for her. They face more competition. They bought a company recently in cancer treatment, which should add growth. She sees growth long term. The PE has fallen to the mid-teens, well below the historic norm.

The chart has broken down; an old support level became resistance and has been falling since. Wants to see the chart settle first. The chart has broken lows from 2022 and 2023 and is below that.

Is -30% the past year. They need to hit the 5% earnings growth target and talk about high-single digit growth for the rest of the year. They're in a good business, but has been slow. Th move by Medicaid will help. She still likes this. It reports tomorrow. She's bullish healthcare.

Is a growing business (diagnostics and devices) given demographics. Organic growth is a solid 10%. They just announced a serious acquisition but won't be accretive for a few years, and they lost some market share and higher costs, but there are signs the company has turned a corner. Has usually traded at 23x PE, but is 18x today. Strong balance sheet.

They report Thursday. Is down 20% this year after a so-so quarter and face a lawsuit for their baby formula.

It is in a very difficult space like Biotech. It dropped 10% in a day after the earnings report and continued its downward trend after a small rally. It is very weak now and hitting new lows that haven't been seen in a while. It is technically negative so be cautious. He thinks there is more downside.

Still owns it, but ABT has been struggling. It's still attractive within healthcare. Trades at a reasonable PE and pays a decent yield. Would buy current lows.

One of her holdings in the space. This higher-quality name has both growth and less execution risk.

Acquisition announced earlier this month looks really attractive, and would also allow targeted cancer treatments. Paid more (north of $20B) for that purchase, so it won't be accretive until a few years out. Stock went down on that. Financing the acquisition internally with debt and cashflow. Over time will be accretive, and gives them a new platform for growth. 

High single-digit organic growth in its underlying businesses. PE is really attractive at a bit over 20x, but doesn't represent the true growth of the business. Yield is 1.99%.

Diversified, global. Medical devices, diagnostics, branded generics in emerging countries, and nutritionals. Used huge boost from Covid to invest in R&D. Lots of product launches coming out. Topline usually grows high-single digits, and earnings double digits -- well set up to do that. Increased dividend 53 consecutive years. Yield is 1.88%.

Medical devices are the one area he's been willing to be in. He likes ABT as a diversified medical device player. Another go-to name is ALC, which focuses on eye health.

Very stable and pays a nice, reliable dividend (rising over the last 60 years). Many buy this for the safe dividend. Expect modest capital appreciation. Safe.

Pharma is in the penalty box, but medical devices are not (so far). Organic growth in the core business is nearly 10%, strong. They enjoy massive demographic support. The PE is around a low 20x PE. Has strong growth. Wait for a pullback to enter.