Opinions
Norman Levine
Covidien Ltd.
COV-N
SELL
Nov 03, 2014
Stock price when the opinion was issued
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(A Top Pick July 27/12. Up 24.42%.) One of the things he liked is that it was US-based but Irish Incorporated for tax purposes. In the hospital supply business. Had a generic drug subsidiary, which was spun out to the shareholders at the end of June, which he sold as soon as he got it.
American company headquartered in Ireland for tax reasons. Hospital supply, surgical supplies. Goes up and down with the economy because with insurance when you are working you get more elective surgery. Bought when people were out of work and stock price was depressed. It was not a problem with the company but with the economy. Leader in its sector.
Buying for new clients. It is the largest hospital supply company. Operating room supplies, disposable. Economically sensitive. Operating rooms are used more when people can do elective surgeries – employed and with health insurance. 1.9% dividend. They want to increase their payout.
Markets have run up so substantially last year that there are pockets of value but not a lot generally everywhere. He is hoping that Q1 provides some opportunities for him to enter into names that he wants to buy. If looking for companies that have stable like characteristics and generally grow slowly over time, these are the kinds of companies you want to own. He is adding this for new clients.
Company being taken over (by MDT-N) for a tax inversion and he sold it because the legislative agenda might change and tax inversion may not continue to be allowed. He would go back after the deal closes.