These days even the WSJ, always disinclined to give kudos, is doing high-fives for Abbott. The reason that makes Abbott a hit with Wall Street is that their Ensure nutrition products is a high-growth area for the company, marking it as the fastest growing health care company of comparable size.
Added to that achievement is the fact that the four main operating segments of Abbott – nutrition, medical devices (for which the company became known), prescription drugs in emerging markets, and medical diagnostics – are all expanding at faster rates than other large cap stocks. Total sales grew 8 percent in the second quarter as compared to a year ago and adjusted earnings per share grew by 17 percent during that same period. To quote the WSJ: “Not bad for a company with a market value north of $100 billion.” While it will be challenging to maintain the pace over the long term, analysts on “The Street” remain convinced that the company will experience continuous annual growth of about 6 percent over the next few years. Some of the reasons for the confidence is that Abbott has recently launched some popular new devices, and its generic drug industry, while remaining relatively unimportant in the U.S., is finding good reception in Russia and India where demand for safe, reliable medication is increasing. And, Abbott has a diverse manufacturing base that is expected to protect the company from the vagaries of change in international relations. Here’s to Abbott – a good example of a fine American company – and one for whom my home town has a particular soft spot due principally to the fact that the 2nd largest Abbott campus is based locally.
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