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BCR
4
7.02%
1.04%
9.67%
1.55%
-12.03%
1.45%

Symbol
BCR
Trade
80.51
Volume
865,842
Avg Vol (3m)
1,031,890
P/E
16.89
Market Cap
7.86B
PEG Ratio
1.13
P/B
3.77
Pct from Yr High
-20.77%
Pct from 200d MA
7.17%
Short Ratio
3.4
EPS Est (next yr)
5.69
EPS Est (current yr)
5.05
Pct from 50d MA
6.05%

CR Bard (NYSE:BCR) sales rose 1% YoY (6% constant currency) last quarter while EPS rose 12%, despite hospital budget tightening. Demand for Bard products and services for vascular, urology, oncology and surgical products will grow alongside the global population and thanks to ongoing new/upgraded product rollouts. In ‘08, revenue was $2.45bn, up from $1.979bn in ‘06 while EPS rose to $4.06 in ‘08 vs. $2.94 in ‘06. BCR has upped its dividend payout for 37 consecutive years.

Its Agento silver coated endotrachial tubes reduce ventilator-associated pneumonia, with demand benefiting from hospital demand tied to CMS’s payment halt to certain preventable infections last year. StatLock devices help IVs stay in place, benefiting from demand tied to reducing unnecessary needle sticks. BCR’s IC Foley catheters help prevent hospital UTIs.

In ‘08, the company sponsored 21 clinical trials, up from 4 in ’04, suggesting a solid pipeline. Atrial fibrillation is fast growing, benefiting A-Fib catheter demand. BCR is a leader in the breast biopsy market. The PTA market is growing 11% annually and offers upside tied to BCR catheter sales. The market for peripherally inserted central catheters, PICC, is growing 16% annually. PICC and global port markets account for 70% of oncology sales, with the port market growing 8% annually.

Bard's hernia products benefit from 7% annual hernia repair growth. The primary overseas markets are Europe and Japan, with upside opportunity tied to investments in other markets including China. 80% of sales come from products #1 or #2 in their markets. BCR’s vascular sales (26% of total sales) rose 19%, helped by A-Fib Catheters, in ‘08. Its urology sales rose 8% (29% of sales), thanks in part to StatLock. Its oncology sales, boosted by PICCs, rose 16% (26% of sales). Surgical specialties sales were up 1% (15% of sales).

BCR’s target is 10% constant currency revenue growth. U.S. sales were up 7%, 2% in Europe and up 6% in Japan – other markets rose 13%. BCR expects the back half of ‘09 to improve on constant currency and is guiding to 14% full year EPS growth. Capital equipment expenditures by hospitals have sparked inventory reductions through the channel, providing upside on restocking. BCR saw breast biopsy marker line sales up 22%. LifeStent sales rose 68% in the U.S., up 49% globally. Urology sales were also weighed down by channel inventory reductions, offering upside. In Q2, oncology sales in the U.S. were up 8% (accounts for 78% of global oncology sales). Q2 gross profit was 61.8% (62% adjusted), up 80bps YoY. SG&A to sales improved by 220bps. BCR bought back 1.9mn shares in Q2 and 2.3mn y-t-d.

Disclosure: Long BCR.

Source: Future Hospital Revenue Boom Benefits CR Bard