Bruce Cooper
Koninklijke Philips Electronics
PHG-N
BUY
Jul 29, 2008
Have been going through a slow motion restructuring over the last 5 years, which has been the right thing to do. Balance sheet is in great shape. Expected to buy back about 10% of their shares this year.
No, it's not a European version of GE. Rather, PHG has done well, but their sleep apnea machine has gone into recall and attracted lawsuits. This is weighing on the stock, though long-term this is a good investment. Still happy to own it. But who knows how this or any lawsuit will end, and the overhang will continue over this stock.
Fairly significant decline, but hasn't floored yet. There's never just one cockroach. Interesting franchise at the right price. Need some kind of catalyst before he'd get excited. Stay away for now.
It is on sale since there is a lawsuit regarding the CPAP machines which have been recalled. However the rest of the business is doing well. The risk is what the cost will be coming out of the lawsuit, but the risk/reward is OK. Buy for the longer term.
Difficult time. Hasn't rationalized their business the way Siemens has. Needs to look at cost of capital of all businesses and get rid of non-core ones. No need to own. Instead, look at Siemens or US industrials.
Lawsuits are behind them. Stock's rallied off lows, still a long way to go. Struggling in a number of its core businesses. Lots of competition, softer margins. Other places to go. Still in turnaround mode.
He sold. Problems with CPAP machines, have since been settled. Slow growth, struggling on a number of fronts. Still in restructuring mode. Look elsewhere.