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Research analyst, long only, dividend investing
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I am not a buyer of Abbott Labs (NYSE:ABT) at this price, as the margin of safety has been depleted by the latest stock appreciation. But I like its latest transaction with General Electric (NYSE:GE). Abbott proved to be a shrewd buyer and seller.

It played Johnson & Johnson (NYSE:JNJ), Guidant (GDT) and Boston Scientific (NYSE:BSX) masterfully and positioned themselves to be the "stealth" winner any way that the JNJ/Guidant or Boston Scientific/Guidant acquisition turned.

The diagnostic segment that Abbott is selling to GE for $8.5 billion generates revenues of $2.5 billion and has a 10% EBIT margin, putting a multiple of 34 times operating profits - that’s a nice fat premium - very smart on Abbott’s part. In GE’s defense, it could probably drive some costs out of this business once it combines it with the rest of its medical business.

ABT vs. GE 1-yr chart:

Source: Abbott Labs or GE: Who's Smarter?