Baxter International Inc (BAX-N)

She owned this a few years ago. It has done well recently, as has the US health sector generally. Its new CEO focused on new product developments that would generate better growth. The company is now fully valued, selling above historical valuation levels. She would consider it on a significant pullback.

Dialysis equipment amounts to 40% of their business. Sold his shares too early. They've had a great run. High 24x forward earnings. But the stock warrants a second look. Dividend just under 1% with negative growth and could
continue downward. Nine consecutive quarterly beats.

(A Top Pick Sept 28/16. Up 35%.) Believes he will be holding this for quite a long time. They are the best in the medical devices/medical supply. Expects it might go sideways for a while and it would be a Buy on any weakness.

(A Top Pick June 30/16. Up 42%.) He still likes this. Healthcare is one of the few sectors, if you can deal with the volatility, that is in a secular bull market that began in 2012. He still likes this today, and it is still a Buy.

Very big in kidney medicine. Healthcare is a really good space to be in. One of the few spaces that is in a secular bull market. This company has some pricing power and some really big competitive advantages that are going to be recognized by the market. Dividend yield of 1.1%.

This supplies hospitals with tons of different stuff and there is a focus on renal, things related to the kidneys. Had a sideways move from 2013 to early 2016, and then broke out. Feels it is really good at these prices. They had a really good Q1 and raised their sales and earnings guidance, and increased their expectations for operational improvements. Has a $65 target on this, but thinks that is a little conservative. Dividend yield of 1.15%.

Doesn’t follow this closely. Scores particularly well on his valuation metrics. Very high ROE’s at 30%. PE of only 9X, which is a very strong valuation metric for him. It beat recently on earnings. 5.4% dividend yield. However, momentum is where it falls down for him, and it scores in the bottom 10, which keeps him sidelined.

(Market Call Minute) There is a lot thrown away with every operation. It is really expensive stuff. BAX-N makes it. Disposable medical supplies.

Medical devices and products. Has a decent dividend yield and has grown is profits at a pretty decent pace. Dealing with some headwinds from a currency perspective. Has been able to hold its profit margins pretty consistently. Good strong balance sheet. Earnings forecasts for next year are trending lower. Trading at about 14X earnings, this is below market multiple. A good grower and this is the kind of stock that eventually rewards investors. You could also look at Thermo Fisher Scientific (TMO-N).

Used to own it. She saw better opportunities. There is not a lot of pricing leverage because there are strong competitors in that business.

From a valuation perspective, this is one of his favourite stocks. Company has announced that it is going to split itself into 2 main businesses, products for haemophiliacs and a kidney dialysis business. They expect that to happen in 2015. This still offers good value as he thinks the stock is easily worth in the low $80’s.

(Market Call Minute) Likes it here. Growth is good for healthcare stocks.

Diversified US healthcare stock. Biggest player in Kidney Dialysis. Earnings came in recently a little lighter than the street was looking for but he still likes it.