When talking about the pharmaceutical and healthcare sectors, Abbott Laboratories (ABT) is one of the few big names that will always attract a lot of attention. Abbott is one of the largest manufacturers of pharmaceutical products, and is one of the most popular stock options available in the market. But why is this so? The basic reason for its popularity stems from the manner in which the stock has grown over the years. Revenues and profits have increased over time, and the stock has offered steady earnings and returns for its investors.
Abbott has managed to maintain its wide competitive moat in the pharmaceutical industry with the introduction of new innovative products and the establishment of new strategic alliances. The company has recently announced the development of a range of new products under the EAS Sports Nutrition Brand. These new drugs will enhance the post-workout recovery of athletes, increasing overall muscle efficiency and allowing them to meet their fitness goals more effectively.
Furthermore, in collaboration with Eisai, Abbott Japan has recently cleared the preconditions that were necessary to acquire the approval of Humira, a completely human Anti-TNF-Alpha Monoclonal Antibody. This is a significant positive development for Abbott as it will allow the company to strengthen its position in integrative neuroscience and neurological and psychiatric medicines.
Abbott has also broadened its alliance with St. Jude Medical (STJ) for the development of a new range of cardiovascular products. The two companies have announced 'Choice Alliance', a multi-year joint initiative aimed at providing U.S. citizens access to a robust portfolio of interventional cardiology, cardiac rhythm management, electrophysiology and intravascular imaging and diagnostic technologies. This strategic move is a positive development that will surely help the company in strengthening its presence in U.S. markets.
Another positive development that is expected to help the stock in its upward run is the recent clearance that Abbott received from the FDA. This gives the company the much-awaited go ahead to use its iFS Advanced Femtosecond Laser in order to facilitate the creation of bow-shaped or curved arcuate incisions in corneal surgeries. Although Abbott already has a comprehensive portfolio of cataract, refractive and eye care products, the recent clearance should help the company in widening its competitive moat in the pharmaceutical industry.
Abbott also has a range of important research projects in the pipeline that are sure to give the company a strategic advantage if they are successful. One of the most important projects among these is the "Pilot" project which iterates Abbott's commitment and aggressive resolve in pursuing a breakthrough in the treatment of Hepatitis C. Abbott has reported positive data from Phase 2 of its "Pilot" study and the possible success of this research could redefine Abbott's position in the global pharmaceutical industry.
Another significant breakthrough for Abbott is the positive result of phase 3 of investigational treatment for advanced Parkinson's disease. Abbott's Neuroscience and Pain Research Division is conducting innovative research in neuroscience. The department is developing compounds that can target neuroreceptors, the regulators of neurological functions. The final results of these studies could pave the way for exponential growth in market share and could subsequently grant the stock the impetus to boost revenues.
Abbott is a massive stock with a market capitalization of more than $97 billion, and trading volume of nearly 7.5 million. In the first fiscal quarter of 2012, the stock has reported a staggering rise in profit of 44% year-on-year, which has largely been the result of strong drug sales. Looking at the stock's financial performance in the current year, I believe that Abbott is poised for higher revenues and greater cash flows in the current financial year.
Johnson & Johnson (JNJ) is one of the largest direct competitors of Abbott and has grown exponentially over the years, establishing a strong reputation in the global pharmaceutical market. However, the stock is currently facing an array of problems that have impeded its upward growth in the market. The biggest problem among these is the lawsuit filed against the company over an antipsychotic drug called Risperdal. Legal problems and lawsuits seldom go well with investors who are inclined to believe that the indicted business is involved in unethical and immoral behavior. As a result, the stock's performance has recorded a noticeable slowdown in the last few days and this strongly reflects weak investor sentiment for the stock. Potential investors as well as existing stockholders eagerly await to see how the stock responds to these legal challenges. Recently, Abbott has reported a much impressive performance and I believe that it is a safer and profitable investment option under the current circumstances.
Sanofi (SNY) is another global pharmaceutical business that is considered by many investors as an alternative investment option against Abbott. It is true that the company has grown steadily over the years, catering to an international market with a diversified product portfolio. However, a series of recent legal pitfalls have encouraged investors to believe that the stock will inevitably undergo a radical revision in the current financial year that will set it much lower than its current position.
Eli Lily (LLY) is a good alternative for investors considering the best investment options in the industry. The stock has managed to stage a strong recovery amidst predominantly favorable market conditions and strong investor sentiment. Leading financial highlights for the current fiscal quarter suggest that the stock is strong and is poised for growth.
However, the fact that Abbott offers greater returns on investment simply cannot be sidelined. Therefore, I believe that Abbott is still the best option right now because it has much more to offer than any of its competitors. Investors should hold this stock for higher earnings and returns, while those considering it should jump in as this is the perfect opportunity to maximize returns on investment. The stock is showing strong signs of growth and the company is generating higher revenues. Compared to its industry as a whole, I believe Abbott is the safest and most viable investment option.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.