C.R. Bard, Inc. (NYSE:BCR)

CAPS Rating: 4 out of 5

The Company is engaged in the design, manufacture, packaging, distribution and sale of medical, surgical, diagnostic and patient care devices.

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Player Avatar JohnCLeven (77.35) Submitted: 4/22/2013 12:45:09 PM : Outperform Start Price: $97.89 BCR Score: +27.13

BCR has been on my radar for a while. BCR exhibits many of the characteristics that I find appealing in a business including: high returns on capital and equity, consistent growth in earnings and free cash flows, share buybacks, and a solid balance sheet.

BCR has a solid position within the medical device industry, and I believe that probability is very high that BCR will continue to create significant value over the next 5-10 years, and probably much longer. At today’s 6.8% free cash flow yield, this high-quality business should outperform in the long run. I am also following Donald Yacktman, and valuemoneygreen, both of whom recently added BCR.

Long term pick.

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Member Avatar valuemoneygreen (83.40) Submitted: 4/24/2013 3:23:01 AM
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Hah! Yacktman is on my radar too. Exellent money manager with ideas and thinking in line with our own thoughts. We should compare lists of equities we watch sometime! I bet they would be very similar.

Member Avatar JohnCLeven (77.35) Submitted: 4/24/2013 10:07:59 PM
Recs: 1

I use finviz, yahoo finance, and google finance for screening.

I don't have a set list I follow. I start every screen wih some general 5 yr avg ROI and ROE parameters (the option for 5 yr avg's is the best part of the google screen), and usually a minimum eps growth rate too.

I bet our lists would be pretty similar.

I am currently working through a project based on the following quote from Berkshire's 1987 shareholder letter:
"The Fortune study I mentioned earlier supports our view.
Only 25 of the 1,000 companies met two tests of economic
excellence - an average return on equity of over 20% in the ten
years, 1977 through 1986, and no year worse than 15%. These
business superstars were also stock market superstars: During the
decade, 24 of the 25 outperformed the S&P 500.

The Fortune champs may surprise you in two respects. First,
most use very little leverage compared to their interest-paying
capacity. Really good businesses usually don't need to borrow.
Second, except for one company that is "high-tech" and several
others that manufacture ethical drugs, the companies are in
businesses that, on balance, seem rather mundane. Most sell non-
sexy products or services in much the same manner as they did ten
years ago (though in larger quantities now, or at higher prices,
or both). The record of these 25 companies confirms that making
the most of an already strong business franchise, or
concentrating on a single winning business theme, is what usually
produces exceptional economics. " - 1987 Berkshire Letter

I consider Value Line my favorite source of data. I spent quite a long time going, page by page, through ALL 2649 companies in the Value Line universe, recreating the study that Buffett signed in the previous quote. I screened, by hand, for avg 10 yr ROE over 20%, and no years under 15%. Just 124 of the 2649 companies, or 4.68% of the Value Line universe, passed that screen. And they are:

AAP, ABT, ACN, ADP, APH, APOL, ARO, ATK, AVP, AZN.BAX, BDX, BF.B, BLL, BMY, BTI, CAT, CEC, CHRW, CL, COH, COL, CPB, CPSI, CTSH, DCI, DD, DE, DEO, DLTR, DRI, DST, DVA, EAT, EL, EMR, ENR, ESRX, EV, FAST,, FDO, FDS, FII, FLIR, FRX, GGG, GILD, GIS, GPS, GRMN, GSK, HD, HIBB, HRB, HSY, IBM, IFF, IGT, IMO, INFY, JCOM, JNJ, JW.A, K, KMB, KO, KR, LH, LKX, LLY, LMT, MA, MAT, MCD, MDT, MHP, MIDD, MKC, MMM, MNST, MO, MSFT, MTD, NKE, NSR, NUS, NVO, OMC, ORCL, PAYX, PEP, PETS, PII, PM, POOL, PX, PZZA, QSII, ROL, ROST, SAP, SEIC, SHW, SLGN, STJ, SYK, SYY, TECH, THI, TJX, TSM, TTC, TUP, UL, UNH, UPS, UTX, VAR, WAT, WDC, WMT, WXS, YUM

Ofcourse there are a few crappy companies on this list, and quite a few great ones that did not make this list. However, 79% of the companies on this list outperformed the S&P over the past decade, NOT even inluding divideds. 56.4% had a return that doubled the markets return. The avg 10 year return for companies on this list was 298.30% while the S&P gained 75%, again not including dividends. The median was 145%

I will be posting a blog with all this research, which ofcourse is subject to any errors I probably made, but still shows that Buffett's quote I cited, an love for ROE, seem to be very well founded.

Member Avatar JohnCLeven (77.35) Submitted: 4/24/2013 10:09:52 PM
Recs: 0

cited, not signed*

Now time for sleep.

Member Avatar JohnCLeven (77.35) Submitted: 6/13/2013 10:42:52 AM
Recs: 0

http://money.msn.com/business-news/article.aspx?feed=AP&date=20130612&id=16588742

This amounts to about 5% of current market cap.

Member Avatar valuemoneygreen (83.40) Submitted: 10/23/2013 10:47:35 AM
Recs: 0

I am interested to see if you end your pick. I think at $135 BCR is at full value relative to the market. Thoughts?

Member Avatar JohnCLeven (77.35) Submitted: 10/23/2013 11:45:42 AM
Recs: 0

This and MMM.

I have BCR valued around $131 roughly, and MMM around $113.

I'd love to upthumb either of them if they get cheap again.

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