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Becton, Dickinson and Company Message Board

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  • mimi_2996 mimi_2996 Aug 18, 1999 9:35 PM Flag

    problem area

    I guess mostly we are agreeing. Most of the folks
    seem disappointed because stock price came down. But
    the fact is, the stock should not have been bid up to
    $40 to $47 range. I used to own this stock between
    Aug 97 to Dec 97 in exactly same price range, (with
    an identical covered call position). The major
    reasons for the stock run up was due to the idea that BDX
    will be doubling the top line in 5 years time.

    I am observing that wall street analysts are
    obsessed with the term "growth". I do agree that growth is
    important but the stock price run ups on some vague "PEG"
    is ridiculous. After my BDX shares were called off
    in December 97, I was stunned that the stock price
    ran up like it did. Then I was watching the quarterly
    reports regularly and was always wondering how the high
    prices could be justified.

    I am comfortable with
    the current prices. The financials and fundamentals
    make sense so one can hold for a long term
    appreciation or for trading in a trading range. If the stock
    dips by a dollar or so, I am planning to double up
    with similar covered call position. My cost would work
    out to $22 or so.

    As somebody else eloquently
    observed, the down grade of the debt is not a serous matter
    (I term that as routine) at the moment unless the
    company wants to issue more notes. We as share holders
    should worry what the company will be earning and what
    the market expectations could be (albeit long bond
    interest rate etc). Good luck.


    (P.S I
    hope you do not consider this as "peddling". Have a
    look at Beckman Coulter. This is my favorite though I
    have not made much money out of it (yet). I think this
    company has assimilated the acquisition and has a good
    cash flow. If the next one or two years pass by
    without any financial debacle, I think the stock will be
    double. Again, this stock also is languishing because of
    lack of "growth" in the "top line". To me it appears
    bottom line will grow handsomely and that is enough.
    Similarly, I think the bottom line in BDX will be OK).

176.95-2.55(-1.42%)1:09 PMEDT