So if this company has $7B in sales, our entire planet of 7B people must each be getting 10 shots per year already from just BD alone.
So as I've asked before...
Where would growth come from?
Most of you on this board don't know much if anything about this company and yet you continue to offer up thoughts and speculations about its continued success.
If you're smart, sell everything now and cut your losses. If you're not smart, stay in here and tell me how I'm wrong.
How much would BDX be trading for if they were to sell a needle for 40C or even 80 c ?
Cromer thinks for a lot !!
One other thing IVguru. Syringes aren't even the only things they sell in that segment.
"BD Medical produces a broad array of medical devices that are used in a wide range of healthcare settings. BD Medical’s principal product lines include needles, syringes and intravenous catheters for medication delivery (including safety-engineered and auto-disable devices); prefilled IV flush syringes; syringes and pen needles for the self-injection of insulin and other drugs used in the treatment of diabetes; prefillable drug delivery systems provided to pharmaceutical companies and sold to end-users as drug/device combinations; regional anesthesia needles and trays; and sharps disposal containers"
Some of those things cost a lot more than syringes.
In short, trying to guess the amount of end-users BDX has, and then assuming how much revenue per BD Medical is receiving is a nice exercise but is ultimately faulty and probably doesn't give you the right answer.
Clearly there will be growth in the use of these devices from world wide population growth and a greater number of doctor visits.
This is a company that has gets returns on equity in the mid 20s basically unlevered yet the company trades at 12-13 times earnings. A company with those type of metrics doesn't have to grow revenue a whole lot to be a very good investment.
"How'd they get the 5 shots if they didn't have healthcare?"
Because that's a mean number. That includes people who get 0 and people who get 1000. We can assume that in the developed world its probably a lot more.
"Growth comes from???"
You are missing a couple of things here.
#1 Those five shots doesn't even include over half of the company's revenue. The rest of the company's revenue is from faster growing areas.
#2 You are forgetting about the growth in world population which is 1.14% a year.
#3 A growth to six shots per person would represent a 20% jump. Maybe that happens over a period of years lets say ten. So already we are at 3% revenue growth per year from this business.
Remember too that there are a lot of fixed costs in this business so operating profit will grow faster than revenues.
Additionally, BDX has very high returns on invested capital which are in excess of its cost of capital. That means, it will have excess cash to return to shareholders which increases the growth.
As I said, I'd buy the idea that a competive threat will emerge to take share from BDX and pressure their margins, though none really has.
What I don't buy is your argument that BDX is only participating in non-growth markets. That simply isn't accurate.
To: Bostonkenmo...Do yourself, and all others reading this board, a favor. Refer to jrothberg1's 19-Mar-11 posting. The "Guru" refuses to understand / admit that BD manufactures and sells anything other than the "$0.10" syringes.