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Becton, Dickinson (
BDX) is another health care name that investors hate this fall. Becton is the world's largest medical supply company, manufacturing and distributing surgical instruments such as needles, syringes and scalpels to facilities all over the world. With a short interest ratio of 12.59, it would take more than two weeks of buying pressure for shorts to get rid of their bets against this stock.
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Becton's biggest business is still in basic medical instruments, but the firm has been at work for years to grow its complex high-margin medical equipment (like oncology and pathology diagnostic devices) into a bigger piece of the revenue pie. Together, those two parts of BDX's business provide a very complementary whole -- the basics pay the bills and provide downside protection from a bumpy economy, while high-tech devices hold the promise for revenue growth and margin expansion. That's been a key to the year-over-year sales growth BDX has booked since the financial crisis.
The latest stage of "Obamacare" kicking off this week should usher in a big tailwind for BDX. Whatever your politics, there's no question that an aging baby boomer demographic with more government-mandated insurance is good for medical device sales. And with one of the most-trusted brands and most established distribution networks out there, Becton, Dickinson is uniquely positioned to take full advantage.
Earnings the first week of November could have short squeeze implications for this stock. Stay tuned.