"Stocks go up, stocks go down". All the hype,
fear, "irrational exuberance, and emotional swings
don't change the fact that "stocks go up, stocks go
If you are worried about BDX, STOP IT. Instead of
about the "tick by tick" movements of BDX, go to
and see what they picked this week. You can find
their "member's only"
They have a great track record (this week, 11 of their
hit new highs), and they stress DISCIPLINE over
Personally I do not think there will be any
offers this quarter.
The company just issued a pretty
strong warning. The price is cheaper but is it cheap
enough for the additional risk an acquirer would be
taking on. Since most deals today are done at a premium
why pay a premium and take on debt for a company that
may not be growing very fast.
I think BDX is
on a lot of companies radar screens but that many
will wait for one or two Quarters to assess how bad
the BDX situation atually is before any moves are
Long term this is still a great company. I was happy
to get in under thirty and if I am wrong and a
buyout happens I made a great short term trade but if it
doesn't I still like the prospects 2 to 3 years out.
Here's my read on who might like B-D:
Tyco...Medical division. Could add to earnings immediately,
which is a stated goal. They could slash $250-400M of
costs out and get extra leverage w/ purchasing in the
hospital market. Score 9.0 (out of 10).
2) J&J. Would
like to add B-D's clout in diabetes with their $1B
Lifescan division. The diagnostics would be a fit also.
Syringes is a push. Cost savings could even be greater
given location. Score 8.5
3)Roche / BMD. Ditto to
J&J accross the board. Score 8.5
again, although Abbott has a syringe deal with Sherwood,
and could value diagnostics lower Score 7.5-8.0
Cardinal Health (DARK HORSE). Good fit with their long
term care, disease mgt, pharmacy, and Allegiance
hospital and laboratory supply divisions. They have been
putting out big bucks recently. Score 7.0 but could go
Net net...B-D could be in play and at these prices
it's a very tempting morsel.
is here again. The last couple of days I've
talked to several people at B-D and they say the company
is back in the BUNKER mindset. Staff cuts, travel
cuts, projects cut or on hold, and another round of
write offs (early retirement program is a catch all for
the big bath).
Let me say this up front...B-D is
a company with some GREAT products and some
EXCEPTIONAL talents (mostly in production). However, their
great products are in slow growth markets where they
already have exceptionally high market shares (90% plus
for some products). A return to the old B-D and it's
risk adverse ways isn't going to get 10% top line
growth. IMHO year 2000 top line growth will be back at
the 2% level if they only focus on downsizing the
organization & cut expenses (haven't they been doing that for
the last 3 years already).
But don't worry, this
baby is ripe for a take over and shortly I'll take a
shot at predicting the candidates and explain why they
would love to have B-D at it's new reduced price tag.