Wednesday, January 8, 2014

A Post Spinoff Look At Abbot Laboratories

Sure, Abbott Laboratories separated its research based bio-pharmaceutical division into the wildly profitible AbbVie. That doesn't mean it is finished finding innovative ways to increase value for its shareholders. Here's a snip from a piece recently published at The Motley Fool. Read the full article here.

Since its modest beginning as a single pharmacy in 1888, Abbott Laboratories (NYSE: ABT  ) has been a health care innovator. Recently, the company has been the subject of analyst upgrades, and purchases by top-performing funds. Now that the dust has settled from the AbbVie spinoff, it's much easier to get a clear picture of the company's growth opportunities. Here are some factors to look out for in the months and years ahead.
A correctable mistake
Skittish investors often exhibit a knee jerk reaction to product recall news. Following the voluntary supplier recall of pediatric nutrition products last August, Abbott shares traded near their lowest levels in months. This was a voluntary recall without any associated health issues, that will probably lead to a year long reduction in topline revenue of 1%-2%. With a company as well diversified and financially sturdy as Abbott, this is exactly the sort of opportunity that smart long-term investors sink their teeth into.
The hit taken by Abbott's International Nutrition segment is likely to reverse before the end of the year. CEO Miles White, claims the voluntary recall of pediatric nutritional products in China that began in August 2013 reduced total company sales by about 1.7% for that quarter. During the first nine months of 2013, International Pediatric Nutritionals grew 14% despite the disruption, making it the company's fastest growing segment. It is likely to continue driving growth, especially once the disruption is mended.
Again, read the article only at The Motley Fool here.