Seeking Alpha
Long only, short only, research analyst, tech
Profile| Send Message|
( followers)  

Abbott Laboratories (ABT) is the world's largest company in the nutrition products market and the second largest in the field of diagnostic products. The company has a worldwide customer base, because it not only sells nutritional products but also medical equipment and pharmaceutical supplies. 56.6% of Abbott Laboratories' entire revenue is generated by its pharmaceutical sector.

In 2010, Abbott Laboratories generated about $34 billion in revenue and has shown remarkable growth in the financial sector. Its laboratories operate in more than 130 countries. Abbott Laboratories has completely eclipsed its competitors with a market capitalization of $97 billion and a trading volume of $7.5 million, while immunizing its business against false market forces.

Since last week, the company trades its stock at around $61 and if we compare this price with recent figures, it shows that in the last year stock trading was at $48, and at the beginning of 2012 it traded at $56.

As of last month, Johnson & Johnson (JNJ), Abbott's biggest competitor, has shown an increase of 0.42% in its stock and traded at $65. Abbott Laboratories is currently trading at $61. tJohnson & Johnson has a wide diversification in more than 170 countries. Since Johnson & Johnson is facing several legal situations, its reputation and dependable name are keeping it afloat in the market.

Merck (MRK) which is the second biggest growing competitor of Abbott Laboratories, has traded its stock at $39, showing a 0.36% increase in its stock in the last three days. But, due to its patents expiring this year, it may face some troubles.

Abbott has recently sued Watson Pharmaceuticals (WPI) for copying one of its leading products. It is not yet known who will suffer in this current situation, Abbott or Watson.

Since January, some of its other competitors, like Pfizer (PFE) and Roche Holding Ltd. (OTCQX:RHHBY), have seen an increase from $21 to $23 and $42 to around $45, respectively. GlaxoSmithKline (GSK) has also shown a good increase in stock from $39 to $46 over the last year, while AstraZeneca (AZN) has shown a decrease from $49 to around $45 in stock. This indicates that it's not an easy task competing in the medical market.

Abbott Laboratories has recently announced a development of self-expanding stent, which has portrayed this company as one with humanitarian, rather than motivational, goals. This stent will be developed to minimize friction in helping patients suffering from peripheral artery disease. This disease not only affects the lower limbs and other body parts, but it can also leave a patient disabled permanently.

This is one of the main reasons Abbott Laboratories continues to be a market leader worldwide. Abbott Laboratories has undertaken medical research with Merck to revolutionize cancer treatments. It has also collaborated with a genetics laboratory to develop a diagnostic test to identify the early stages of disease within bones and joints.

By the look of its stock performance during the last three years, it is quite evident that the company will soon bear some fruitful results from decisions made in the past. Acquisition of Advanced Media Optics, STARLIMS and Solvay Pharmaceuticals has not only made its market position stronger than ever, but also given it a wide range of pharmaceutical products which allow it to drive toward the strong operating cash flows.

By the end of the current year, this company will split its research-related business into a research-based company named Abbvie. The company is doing this to separate its medical products business from the research-based business to capitalize on growth. Abbott's medical device division manufactures blood analyzers and glucose reading devices for diabetics, and also produces PediaSure and Ensure, nutritional supplements for children and adults.

The split in its businesses will do great work for the investors and shareholders, because when the company splits, the shareholders will receive shares in both of its medical products and research-based business. We are seeing a run on the stock these days. It is quite certain that these two new stocks will collectively be given a trade price which will be the same as that of single stock, and the old stock shareholders will receive shares in new stock too.

Abbott Laboratories will work in two ways: the research based unit, Abbvie, will focus on its growth in the states by projecting at a rate of 3-4% a year and Abbott, on the other hand, will be focusing globally on its faster growth rate in the emerging medical devices market.

It is certain that Abbott's major medical breakthroughs and humanitarian image have played an important role in making it a market leader. Abbott Laboratories has gained an impression as a dynamic company after its acquisitions in Europe and the Middle East. If it shows no signs of letting up its hold on the market in future and balances a pleasing and reassuring relationship between people and its shareholders, then there will not be any medical company in the world that can challenge its market leadership.

Source: Abbott Labs Completely Overshadows Competitors