Abbott Is A Solid Buy For Gains This Year

Apr. 5.12 | About: Abbott Laboratories (ABT)

When it comes to medical technologies and practices, the majority of people will only encounter any developments if they're unfortunate enough to have to go to the hospital. They might see the occasional medical breakthrough on the news. However, behind the scenes, companies like Abbott Laboratories (ABT) are constantly working to ensure that both the medical technology that is available for use, and the techniques for using it, are as effective as possible. There's no doubt that Abbott Laboratories and its competitors are responsible for some of the most important medical developments of our times. However, is the importance of Abbott Laboratories in the modern world reflected by its stock value? And how does Abbott Laboratories compete with similar companies?

Currently, Abbott Laboratories' stock is trading at around $61. Compared with recent figures, this price demonstrates a considerable and steady growth: this time last year (April 2011), its stock was trading at $49; at the start of 2012 it was valued at $56. The price of Abbott Laboratories' stock has seen a considerable increase even since this time last month, when it was valued at over $57. Unfortunately for Abbott Laboratories' stockholders, many of its competitors are seeing an increase in stock value, too.

Pfizer (PFE) has seen an increase from $21 to around $23 since January, while Roche Holding Ltd. (OTCQX:RHHBY) has seen an increase from $42 to around $45 over the same period. Another competitor, GlaxoSmithKline (GSK) has seen its stock increase in value from $39 to around $46 over the last year. However, not all medical development companies are seeing such good fortune. Competitor AstraZeneca (AZN) has seen a decrease in its stock value from nearly $49 to around $45 over the last year, demonstrating that it's not all plain sailing in the medical market. So, how is Abbott Laboratories managing to keep its share price so high when other competitors are seeing their stock fall? And will it be able to maintain this trend?

One reason why Abbott Laboratories continues to be a market leader is that it persists in pushing the boundaries of medical technology developments. In fact, Abbott Laboratories recently made headlines for developing a state of the art self-expanding stent. The stent has been developed in order to minimize friction and potential damage when inserting the stent, in order to help patients suffering from peripheral artery disease. This disease affects the lower limbs and body parts, can not only cause extreme pain and reduce patients' mobility, but can leave patients permanently disabled. This stent will therefore be invaluable in ensuring that blood can flow easily through the lower parts of the body, and it's uniquely designed and flexible form will make insertion easier and less intrusive than ever before. This development not only portrays Abbott Laboratories as a company at the forefront of medical breakthroughs, but the humanitarian element of the development, in that it has the potential to considerably improve patients' quality of life, causes Abbott Laboratories to appear a sympathetic company.

Abbott Laboratories is also conducting a great deal of research into drugs and their administration, alongside its work on medical technology. A groundbreaking study it carried out recently has the potential to revolutionize the way that patients undergoing dialysis kidney treatments are medicated. Conventionally, these patients are treated with a combination of cinacalcet and vitamin D; however, Abbott Laboratories' research has suggested that a more effective way to treat these patients is with a drug known as Zemplar, and this research once again has the potential to improve the of the quality of life of millions of dialysis patients. In combination with the above research on stents, Abbott Laboratories appears to have both the drugs side and the technologies side of the medical research field covered.

Recent work by Abbott Laboratories in collaboration with other medical research companies has portrayed the company as one with humanitarian, rather than economic, motivations and goals. Abbott Laboratories has been working on research with two of its competitors. It has undertaken research and tests with the medical company Merck (MRK) to investigate developments into a diagnostic test which could revolutionize cancer treatments. It has also committed to a collaboration with Genetics Laboratory, which will work to develop a diagnostic test - this test will be used to identify the early stages of infection within bone and joints. The fact that Abbott has been so openly ready to collaborate with its competitors in the pursuit of medical developments portrays it as an incredibly dedicated medical company which is concerned with people and health rather than wealth - a brilliant marketing technique which will, somewhat ironically, benefit its shareholders.

As well as expanding its research and developments, Abbott Laboratories is also physically expanding as a company. Last month, Abbott Laboratories' company STARLIMS Technology obtained French and Israeli distribution companies, and companies in Spain, the Netherlands and Sweden. This was an intelligent move on Abbott Laboratories' part which proved that, despite all the medical research which was hitting the news, the company was still concerned with its economic position and expansion.

Overall, with its genuine medical breakthroughs and the humanitarian image that these perpetuate, it's really no surprise that Abbott Laboratories is a market leader. This, teamed with its recent acquisitions in Europe and the Middle East, create the impression that Abbott Laboratories is a dynamic and forward-moving company. Certainly, in the foreseeable future, Abbott Laboratories shows no signs of letting up its hold on the market, and if it continues to strike a perfect balance between pleasing the public and reassuring its shareholders, it will remain a market leader for a long time to come.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.