Abbott Labs (ABT-N)

Pharma companies are always facing the patent wall, needing to spend R&D to innovate new drugs. Very difficult to predict the next blockbuster. He prefers and owns JNJ and ABT, as they're more diversified.

Has excellent fundamentals across four businesses, including best-in-class medical devices renown in cardiology. However, they face lawsuits over their similac formula which studies show is not harmful. It's unfair. It lost a lawsuit last summer and was hit a $495 million penalty. More lawsuits are coming, though the latest decision yesterday went in Abbott's favour. Last month, federal agencies found that the formula is not at fault. Two weeks ago, ABT reported a clean top and bottom line beat and raised their full-year forecast. Shares would have rallied more without the lawsuits.

Expects it to growth topline and bottom line going forward, usually around the 10% range. Sells branded generic drugs to EMs, medical devices, infant nutrition. Diabetes monitoring product has very good growth. Likes that it's diversified, well managed. Yield close to 3%, grown for over 50 consecutive years.

His favourite in this sector. They just delivered a monster quarter.

They report Wednesday. Are facing legal challenges that their baby formula kills, but last week the FDA and CDC cleared them. This could turn the tide.

They're turning around, given their immunotherapy pipeline, and their device and testing businesses are strong.

Pharma is challenged on growth, whereas devices have robust growth. Its device business has grown exceptionally well, between 10-12% organically. Overhang has been unfavourable comparisons from Covid testing. Reasonable valuation for quite a good company. Yield is 2%.

They lost a major court case last Friday and have to pay nearly $500 million in damages over its formula for premature babies. He feels the verdict is an outrage. Their formula saves lives and doctors recommend it.

They report on July 18. The company is doing very well, but they could lose a looming lawsuit. He wouldn't add more shares unless this breaks below $100.

Outlook is fabulous. Recent lawsuits turning out fine. Would buy at $100/share. 

Diversified businesses in medical devices, testing technology, pharma, nutrition. Selling off as a result of $60M judgement against competitor's infant formula, worries of contagion. Long-term, it will work out. 

Flat over the year. Wonderful product portfolio. Structural driver is heart/cardiac business. Reported yesterday, topline growth 2%. This number is misleading, as cardiac organic growth was 14%, and organic growth outside of diagnostics was 10%. Performing well, growing quite well, reasonable multiple. He'd buy today.

Yes, buy. Almost always they report and the reaction is negative at first, then it recovers. BTW, they had an excellent quarter.

They report Wednesday. Usually, shares climb after the report, then someone finds fault with a single line item, then shares fall. Buy on the dip the next day.

Likes healthcare in general, a larger weight for him. Chart's performing pretty decently relative to the S&P 500. Could give nice returns going forward.