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Becton, Dickinson and Company Message Board

  • HedgeGP HedgeGP Aug 7, 2000 12:40 PM Flag

    NEW HERE

    With decent revenue growth, better bottom line
    growth, some solid products and a valuation at 16x or so,
    what am I missing? Should hold up well in a downturn
    and more important, even if it doesn't knock your
    socks off re internal growth, why won't it just get
    bought out in the $40-45 range. I mean, it's so cheap
    that you have to figure someone could easily swallow
    them up, cut costs, further develop promising products
    etc. and they could do it in the $40 range rather
    effortlessly.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • What you're missing is that the company has
      disappointed Wall Street too often and even when the earnings
      consensus has been met the numbers are not clean,e.g.,a few
      pennies of the earnings have been from the gain on the
      sale of investments.As for the sale of BD,why has it
      not happened yet? As a shareholder I share your pain
      but not your optimism.

      • 2 Replies to laeihs
      • I'm not a shareholder yet -- I like to invest in
        situations at points of extreme pain. I agree re the
        earnings issues. However, I just feel like there is too
        much asset value here. Maybe I should make some noise?
        I have to guess that there are several companies in
        the sector that would be interested at up to $40 and
        actually, higher.

        BDX's results have certainly been
        modest. However, realize that even in '99 when it
        corrected severely, it was still trading at like 20x foward
        numbers. At 15-16X, still growing decently, and with a $5
        billion market cap, it even becomes an interesting
        candidate for a financial buyer (i.e. LBO group), many of
        who are flush with capital.

      • The Street is also very concerned about the
        system "Monster" called SAP that the Company had been
        expecting/projecting major cost savings from but has instead invested
        $200+ million with questionable future
        benefits.

        (look at Market Guide analyst reports available from
        Powerstreet)

    • OK, but I'd like to build a position first.

    • Appreciate your comments.BDX certainly looks
      undervalued with expected EPS of $1.60 this year(ending 9/30)
      and $1.78 next.But as they say, don't fight the tape
      and day in and day out there always is a heck of a
      lot of stock available for sale, blunting any
      attempts at a rally in the stock.

    • I don't intend to fight the tape. I have
      determined what I think BDX is "worth" and I am happy to buy
      it today at a substantial discount to this value. I
      beleive there will be a catalyst that will unlock this
      value over the next year, and it won't be accelerating
      earnings, if you know what I mean.

    • Becton now has FDA approval to market its next generation of IV safety catheters.

      http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfPMN/pmn.cfm?ID=1195

    • It's Clateo Castellini...btw....those that can do.....those that can't post messages like yours. Why don't you build a 103 year old company?

    • Why are you so negative towards King 800m? I
      thought his message made a lot of sense. Doesn't it
      bother you that the stock price is about half of what it
      was 2 years ago?Where is the management
      accountability?

    • With shareholders like you, it's clear why
      management is so complacent. But some of us in the
      shareholder community demand performance. By the way, I am a
      retired CFO of a Fortune 500 company. I have helped build
      a company, which we then sold, creating immense
      shareholder wealth in the process. What have you done?

    • I had much respect for Mr. Castellini. He made
      some much needed changes at BD. But as an investor and
      an employee I am very disappointed with his results.
      I continue to be hopeful that Mr. Ludwig will
      agressively turn this situation arround. I think he has the
      strength to do it. There a lot of people counting on him
      to make some tough decisions. We need to see some
      movement soon.

    • Don't worry about that comment. Undervalued
      assets only remain undervalued for so long. There is
      real value here, particulalry to a strategic buyer.
      And the good news is, even if we can't get the
      strategic buyers involved, there has been a ton of
      LBO/private equity money raise over the past few years, which
      probably at this point has only a 15% hurdle
      rate.

      This isn't a trading stock. And remember, you don't
      buy these things after the rumors start. You just buy
      and wait and make your uncorrelated returns.


      P.S. Speaking of corporate governance and investing,
      check out CCN. On Friday it was trading down $8 to $62
      intraday on rumors that it would not be sold to VIA. Then
      it was halted and the rumors were confirmed. Some
      sellers probably felt pretty lucky to be able to get out
      at even $62 since a chunk of the price was based on
      a probable deal with VIA. However, after the close,
      NWS announced that THEY would be buying CCN for $85!
      Gotta love Wall Street.

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