Baxter International Hiding in Plain Sight
The medical conglomerate Baxter International (BAX) looked like a swooning biotech when its stock lost two-thirds of its value between March 2002 and March 2003.
Since then, Baxter has acted like booming biotech. Its stock has more than tripled in the past five years, easily outperforming the S&P 500 and the Amex Index of large drug stocks.
And at a time when defensive health care stocks aren't feeling well, Baxter gained about 10% for the 12 months ended June 11, comfortably ahead of Abbott and slightly ahead of J&J. The S&P 500 was down more than 10%, while the Amex drug index fell more than 23%."Baxter offers the high predictive value that investors in this increasingly volatile market environment desire," says a recent report by Ben Andrew of William Blair & Co., as he raised his rating to outperform from market perform. Baxter benefits from a "diversified, defensible product portfolio," says Andrew, who doesn't own shares. First-quarter sales rose 8% and earnings per share gained 10% vs. the same period last year, heralding the 14th consecutive quarter in which Baxter beat Wall Street estimates, says a recent Bear Stearns report. Baxter raised its full-year earnings-per-share forecast, excluding special items, to a range of $3.18 to $3.24 from a previous estimate of $3.10 to $3.18.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV