Stock (Symbol) |
C. R. Bard (BCR) |
Stock Price |
$195 |
Sector |
| Healthcare |
Data is as of |
| March 14, 2016 |
Expected to Report |
| Apr 21 – Apr 25 |
Company Description |
 C. R. Bard, Inc. (Bard) and its subsidiaries are engaged in the design, manufacture, packaging, distribution and sale of medical, surgical, diagnostic and patient care devices. . The Company reports its sales in four major product group categories: vascular, urology, oncology and surgical specialty. The Company’s vascular products cover a range of minimally invasive devices for the treatment of peripheral vascular disease and heart arrhythmias. Its urology products include basic urology drainage products, fecal and urinary continence products, urological specialty products and Targeted Temperature Management products. Its oncology products cover a range of devices used in the treatment and management of various cancers and other diseases and disorders. Its surgical specialty products include implanted patches and fixation devices for hernia and other soft tissue repairs, in addition to hemostats and surgical sealants. Source: Thomson Financial |
Sharek’s Take |
 Medical device maker C.R. Bard (BCR) looks to return to double-digit profit growth in 2016. Last qtr BCR had 6% profit growth on flat sales growth, but management expects around 5% revenue growth in 2016, and analysts predict 10% profit growth for the year. C.R. Bard was founded in 1907 and its first product relieved urinary discomfort, which lead to the development of the first balloon catheter. In 1961 the company was focused on urology and then began to move into the cardiology, radiology and anesthesiology markets. Bard makes it a habit of acquiring little companies with product ideas, then bringing them in and doing line extensions. In the 2000s the company became a big player in advanced stents, as drug coated stents took the market by storm. Today Bard is still focused on advancing catheters, as well as stents. BCR is a safe stock with a high degree of certainty. It gets a top safety rating and has increased its dividend in each of the last 43 years. Since 1999 it’s only had one down year in profits (2013). Estimates are for profits to grow 3% next qtr, then 10%, 14% and 12% the following qtrs. That would be solid growth for this conservative stock. But at 20x earnings BCR is selling close to my Fair Value. |
One Year Chart |
 BCR is close to an All-Time high as the dollar has weakened lately and that could mean big multinationals like BCR might get some relief from foreign exchange rates. Lately, that’s been hampering profits but things look to pick up later in 2016. BCR has an estimated LTG of 10% a year in addition to a dividend of around half a percent. I think the stock is around where it should be as its P/E is 20. |
Fair Value |
 My Fair Value on BCR is 21x earnings, which is around double its long-term growth rate. I valued the stock highly because its safe and provides consistent growth at a time where many companies are warning they can’t hit the numbers (and then the stock gets chopped). Analysts expect C.R. Bard to grow profits 10% this year and 10% next year. |
Bottom Line |
 In 2012 C.R. Bard outlined a multi-year investment plan to invigorate growth in emerging markets. Today, a third of C.R. Bard sales come from abroad. In 2013 the company had many charges which affected EPS even though net income was still higher than 2012’s. C.R. Bard has been making medical devices for more than 100 years, gets a top safety rating and has delivered consistent double-digit profit growth. It has increased its dividend for 43 consecutive years, and management also buys back shares. Profits are expected to grow 10% the next 2 years, my calculations show 20% upside to my 2017 Fair Value. BCR ranks 29th of 34 stock in the Conservative Portfolio Power Rankings. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio 29 of 34 |
